Relationship between innovation, regional institutions and firm performance: Micro-evidence from Africa

Mohammed Hussen and Murat Çokgezen

African Journal of Science, Technology, Innovation and Development, 2022, vol. 14, issue 2, 316-332

Abstract: The main aim of this paper is to examine empirically the extent to which firm-specific action, innovation, and an external factor, the quality of regional institution, affect firms’ productivity. To this end, a firm-level dataset from 15 African countries was used and the three-step CDM approach was employed to estimate the relationship. The empirical results of the study highlight that firms that invest in R&D are more innovative and innovative firms are more productive, indicating the importance of innovation for firms’ productivity. In addition, regional institutional quality has a significant positive effect on productivity, particularly for firms at low productivity distribution. Therefore, improving the quality of regional institutions, in addition to promoting R&D and innovation, is essential to enhance the productive capacity of firms in Africa. The present study contributes to the existing literature by providing new empirical evidence on the role of regional/local institutions on firm productivity for a region, Africa, which needs productivity enhancement the most. It is also recommended that further studies, similar to this one, should be carried out in order to better understand the topic in the context of African firms.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://hdl.handle.net/10.1080/20421338.2020.1866148 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:rajsxx:v:14:y:2022:i:2:p:316-332

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/rajs20

DOI: 10.1080/20421338.2020.1866148

Access Statistics for this article

African Journal of Science, Technology, Innovation and Development is currently edited by None

More articles in African Journal of Science, Technology, Innovation and Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().