A Matter of Survival: Development Through Innovation

Tinta Abdoulganiour Almame ()
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Tinta Abdoulganiour Almame: Joseph Ki-ZERBO University, Ouagadougou, Burkina Faso, Postal: Department of Statistics and Economics, Joseph Ki-ZERBO University, 14 PO Box 74 Ouagadougou 14, Burkina Faso.

Journal of Economic Integration, 2025, vol. 40, issue 2, 315-348

Abstract: This paper examines innovation by emphasizing the role of Global value chains (GVCs) and financial development. Using data from 25,690 firms from the World Bank’s Enterprise Surveys (WBES) from 2006 to 2023, extended probit and two-step probit selection models are constructed. The findings show that engaging in GVCs is essential to innovation, with financial development playing a moderating role. Moreover, in addition to participation in GVCs and financial development, human capital is the main driver of innovation. Firm age, top manager experience, firm size, sector of activity, and competition against informal or unregistered firms positively affect a firm’s decision to innovate. However, instrumenting the quality of institutions, business environment, and energy constraints, political instability is a key impediment to innovation even if firms join GVCs and have access to finance.

Keywords: Innovation; Global Value Chains; Human Capital; Financial Development (search for similar items in EconPapers)
JEL-codes: F14 F65 O30 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0946

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