Innovation strategies and productivity growth in developing countries: Firm-level evidence from Pakistani manufacturers

Waqar Wadho and Azam Chaudhry

Journal of Asian Economics, 2022, vol. 81, issue C

Abstract: We examine the determinants of product, process, and organizational innovations, and their impact on firm labor productivity using data from a unique innovation survey of firms in Pakistan. We find significant heterogeneity in the impact of different innovations on labor productivity: Organizational innovation has the largest effect followed by process innovation. But unlike much of the literature, we found a negative impact of product innovation suggesting a disruption effect of new products. We find a strong impact of engaging in knowledge creation on product and process innovation. We also find that external knowledge networks and innovation cooperation play no significant role in firms’ decision to engage in innovation and its intensity, however, vertical linkages with suppliers (clients) promote product (process) innovations. Foreign competition has a negative effect on product innovation and a positive effect on organizational innovation. Exposure to foreign markets both in term of exporting and quality standard certification leads to better innovation performance.

Keywords: Technological innovation; Organizational innovation; Labor productivity; Developing countries; Low-tech industries; CDM model; Pakistan; Textiles & apparel (search for similar items in EconPapers)
JEL-codes: C24 C31 D22 L25 L67 O31 O32 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:asieco:v:81:y:2022:i:c:s1049007822000422

DOI: 10.1016/j.asieco.2022.101484

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