کد مقاله | کد نشریه | سال انتشار | مقاله انگلیسی | نسخه تمام متن |
---|---|---|---|---|
5037195 | 1472387 | 2017 | 11 صفحه PDF | دانلود رایگان |
- We study the effect of informality on formal firms' innovation strategies.
- We use Enterprise Survey data from African and Latin American countries in 2006.
- The effect is significant even controlling for the number of competitors.
- Informality induces competitive pressure beyond increase in number of competitors.
The existence of a large informal sector may be a factor constraining formal firms' choices of innovation strategies in many developing countries. This paper addresses this issue and studies the impact on innovation of competition against firms in the informal sector. Using the World Bank's Enterprise Survey data from a sample of African and Latin American countries, we find that the marginal impact of informality on innovation by formal firms decreases with the intensity of competitive pressure from informal firms, consistent with an inverted-U relationship between propensity to innovate and competitive pressure from firms in the informal sector. This pattern arises even after controlling for the number of competitors, suggesting that the pressure that informal firms exert on formal firms go beyond a mere increase in the number of competitors.
Journal: Technological Forecasting and Social Change - Volume 114, January 2017, Pages 192-202