Firm-Level Innovations in an Emerging Economy: Do Perceived Policy Instability and Legal Institutional Conditions Matter?

Innovation has become a key factor of production, driving and sustaining firms’ productivity and competitiveness. Despite the growing importance attached to innovations, existing studies have produced different results on the factors driving firm-level innovations. This study investigates the factor...

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Bibliographic Details
Published in:Sustainability 2023-01, Vol.15 (2), p.1570
Main Authors: Dunyo, Samuel Kwesi, Odei, Samuel Amponsah
Format: Article
Language:English
Subjects:
Competition
Competitive advantage
Competitiveness
Corruption
Economic growth
Emerging markets
Influence
Informal economy
Innovations
Manufacturing
Manufacturing industry
Politics
Product development
Productivity
Public officials
R&D
Research & development
Sustainability
Technological change
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Summary:Innovation has become a key factor of production, driving and sustaining firms’ productivity and competitiveness. Despite the growing importance attached to innovations, existing studies have produced different results on the factors driving firm-level innovations. This study investigates the factors driving innovations in the service and manufacturing sector firms in Thailand. The study tests proposed hypotheses using cross-sectional data on a sample of 613 firms from the World Bank enterprise survey of 2016. Our empirical results show that specific aspects of the business environment, such as policy instability, legal institutions, corruption, and informal competition, negatively influence non-technological innovations. Contrarily, we find that formal training, foreign technology licenses, research and development have marginal and additionality effects that positively enhance both technological and non-technological innovations. We provide practical implications for firm managers and policymakers in Thailand on adaptive measures to improve the business environment to make it conducive for firm-level innovations.
ISSN:2071-1050
2071-1050
DOI:10.3390/su15021570