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The role of innovation and management practices in determining firm productivity in developing economies

Author

Listed:
  • Bartz, Wiebke

    () (Centre for Development Finance, Frankfurt School of Finance and Management)

  • Mohnen, Pierre

    () (UNU‐MERIT, Maastricht University)

  • Schweiger, Helena

    () (European Bank for Reconstruction and Development)

Abstract

In this paper, we compare the impacts of management practices and innovation on productivity, using data from a unique firm-level survey covering 30 mostly developing countries in Eastern Europe and Central Asia in the period 2011-2014. We adapt the well-established three-stage model by linking productivity to innovation activities and management practices. Results suggest that both returns to innovation and returns to management practices are important drivers of productivity in developing economies. However, productivity in lower-income economies is affected to a larger extent by management practices than by innovation while the opposite holds in higher-income economies. These results imply that firms operating in less favourable business environments can reap large productivity gains by improving the quality of management practices, before engaging in innovation through imitating and adapting foreign technologies.

Suggested Citation

  • Bartz, Wiebke & Mohnen, Pierre & Schweiger, Helena, 2016. "The role of innovation and management practices in determining firm productivity in developing economies," MERIT Working Papers 034, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2016034
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    File URL: https://www.merit.unu.edu/publications/wppdf/2016/wp2016-034.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:tefoso:v:131:y:2018:i:c:p:315-325 is not listed on IDEAS
    2. repec:eee:streco:v:49:y:2019:i:c:p:130-145 is not listed on IDEAS
    3. repec:eee:wdevel:v:99:y:2017:i:c:p:75-94 is not listed on IDEAS
    4. Romano, Livio, 2019. "Explaining growth differences across firms: The interplay between innovation and management practices," Structural Change and Economic Dynamics, Elsevier, vol. 49(C), pages 130-145.

    More about this item

    Keywords

    innovation; management practices; productivity; developing countries;

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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