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Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan

Waqar Wadho () and Azam Chaudhry

No 466, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: We examine the determinants of product, process, and organizational innovation, 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; however, this is mitigated if new products are paired with process or organizational innovations. We find a strong impact of engaging in knowledge creation on product and process innovation. We found that external knowledge networks and innovation cooperation play no significant role in firms’ decision to perform R&D and its intensity, though 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.

Keywords: Technological Innovation; organizational innovation; labor productivity; developing countries; Labor intensive industries (search for similar items in EconPapers)
JEL-codes: C24 C31 D22 L25 L67 O31 O32 (search for similar items in EconPapers)
Date: 2020
New Economics Papers: this item is included in nep-com, nep-cse, nep-ino, nep-sbm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:466

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