Is innovation activity persistent among small firms in developing countries? Evidence from Vietnam

Trinh Long

MPRA Paper from University Library of Munich, Germany

Abstract: Using firm-level panel data collected in Vietnam bi-annually from 2005 to 2013, this paper examines whether innovation is persistent among small firms in Vietnam. The empirical results obtained from dynamic random effect probit and dynamic random effect ordered probit show that the innovation activity is persistent among these small firms. Our estimation results also show slightly different roles of human capital of firm’s owner and employees in innovation activities. While the owner’s human capital is associated with creating a new product, employees’ human capital is positively correlated with upgrading the existing products or production procedure. However, we do not find evidence on the roles of unobserved heterogeneity in explaining this persistence. Our results are consistent with results found in the literature for firms in developed economies.

Keywords: Innovation; Persistence of Innovation; Unobserved heterogeneity; Dynamic Random Effect Probit Model; Dynamic Random Effect Ordered Probit Model; Small and Medium Enterprises; Vietnam (search for similar items in EconPapers)
JEL-codes: C23 C25 L20 O31 O33 (search for similar items in EconPapers)
Date: 2015-04-14
New Economics Papers: this item is included in nep-bec, nep-cse, nep-dcm, nep-ent, nep-ino, nep-sbm, nep-sea, nep-tid and nep-tra
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