Learning, Product Innovation and Firm Heterogeneity in Tanzania

Micheline Goedhuys

No 2005-07, UNU-INTECH Discussion Paper Series from United Nations University - INTECH

Abstract: Using a unique firm level data set on learning and product innovation in Tanzanian manufacturing and commercial farming, this paper sheds light on the various sources of firm learning, investment and collaboration and their relative importance for product innovation. The results indicate that larger and foreign owned firms invest significantly more in human and physical capital than do local micro, small and medium sized firms, and they are better connected to the internet. Their ways of upgrading technology also reveals a better financial endowment. Small and medium sized firms on the other hand report to collaborate more intensively with other local firms on product development, marketing and on the input market and upgrade technology through in-house activities, imitation and cooperation with suppliers and universities. By doing so, they are able to offset the scale disadvantages they face in competing for the market information and inputs – new machinery and specialised labour - necessary for product innovation in imperfect markets.

Keywords: learning; innovation; technological change; competitiveness; multinational corporations; MNEs; small and medium enterprises; SMEs; investment; Tanzania (search for similar items in EconPapers)
Date: 2005
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Citations: View citations in EconPapers (1)

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