Innovation Efforts of Small Businesses in Latin America
DOI:
10.14211/regepe.v10i1.1957Keywords:
Innovation efforts, Institutional dynamics, Institutional reforms, Institutional reversalsAbstract
Purpose of the study: in this paper, we analyze the effects of institutional dynamics on innovation efforts of small businesses in Latin America. Methodology/approach: we use a survey sample of 11,446 small Latin American businesses from The World Bank; The survey comprised answered questions regarding their innovation efforts in the last three years: product innovation, process innovation, and investments in research and development; To assess the effect of institutional dynamics (reforms and reversals), data from the Economic Freedom Index were captured. Main results: we conclude that in small businesses in Latin American countries, innovation efforts may be more linked to the preparation to face an institutionally inefficient environment than to take advantage of the environments that have had an institutional improvement. Theoretical/methodological contributions: these small business movements may be more linked to the search for survival in an uncertain environment, contradicting the expected effects that there would be more innovation efforts when the environment was conducive to it. Relevance/originality: this study is valuable because it allows the analysis of what types of institutional dynamics can lead to what types of responses in innovation efforts of small businesses. Social/management contributions: the study also contributes by demonstrating whether the formulation of institutional reforms can impact small businesses in the Latin American context, thus being important for the development of public policies.
JEL CODE: O32
Downloads
References
Abed, M. G. T., & Gupta, M. S. (2002). Governance, corruption, and economic performance. Washington, DC: International Monetary Fund.
Acemoglu, D., & Robinson, J. A. (2008). Persistence of power, elites, and institutions. American Economic Review, 98(1), 267-93. https://doi.org/10.1257/aer.98.1.267
Alence, R. (2004). Political institutions and developmental governance in sub-Saharan Africa. The Journal of Modern African Studies, 42(2), 163-187. https://doi.org/10.1080/12265080701694512
Alonso, J. A., & Garcimartín, C. (2013). The determinants of institutional quality. More on the debate. Journal of International Development, 25(2), 206-226. https://doi.org/10.1002/jid.1710
Arundel, A., Bordoy, C., & Kanerva, M. (2007). Neglected innovators: How do innovative firms that do not perform R&D innovate. Results of an analysis of the Innobarometer, 9.
Ayyagari, M., Demirgüç-Kunt, A., & Maksimovic, V. (2011). Firm innovation in emerging markets: the role of finance, governance, and competition. Journal of Financial and Quantitative Analysis, 46(6), 1545-1580. https://doi.org/10.1017/S0022109011000378
Banalieva, E. R., Cuervo-Cazurra, A., & Sarahi, R. (2018). Dynamics of pro-market institutions and firm performance. Journal of International Business Studies, 49(7), 858-880. https://doi.org/10.1057/s41267-018-0155-7
Barasa, L., Knoben, J., Vermeulen, P., Kimuyu, P., & Kinyanjui, B. (2017). Institutions, resources and innovation in East Africa: A firm level approach. Research Policy, 46(1), 280-291. https://doi.org/10.1016/j.respol.2016.11.008
Barney, J., & Arikan, A.M. (2001). The resource-based view: origins and implications. In Hitt, M. A., Freeman, R. E., Harrison, J. S. (Eds.), Handbook of Strategic Management (pp. 124-188). Oxford: Blackwell Publishers.
Bhattacharya, U., Hsu, P. H., Tian, X., & Xu, Y. (2017). What affects innovation more: Policy or policy uncertainty? Journal of Financial and Quantitative Analysis, 52(5), 1869-1901. https://doi.org/10.1017/S0022109017000540
Bradley, S. W., McMullen, J. S., Artz, K., & Simiyu, E. M. (2012). Capital is not enough: Innovation in developing economies. Journal of Management Studies, 49(4), 684-717. https://doi.org/10.1111/j.1467-6486.2012.01043.x
Bräutigam, D. A., & Knack, S. (2004). Foreign aid, institutions, and governance in sub-Saharan Africa. Economic development and cultural change, 52(2), 255-285.
Crespi, G., & Zuniga, P. (2012). Innovation and productivity: evidence from six Latin American countries. World development, 40(2), 273-290. https://doi.org/10.1016/j.worlddev.2011.07.010
Cuervo-Cazurra, A., & Dau, L. A. (2009). Structural reform and firm exports. Management International Review, 49(4), 479-507. https://doi.org/10.1007/s11575-009-0005-8
Dau, L. A. (2012). Pro‐market reforms and developing country multinational corporations. Global Strategy Journal, 2(3), 262-276. https://doi.org/ 10.1111/j.2042-5805.2012.01033.x
Dau, L. A. (2013). Learning across geographic space: Pro-market reforms, multinationalization strategy, and profitability. Journal of International Business Studies, 44(3), 235-262. https://doi.org/10.1057/jibs.2013.5
Dau, L. A., & Cuervo-Cazurra, A. (2014). To formalize or not to formalize: Entrepreneurship and pro-market institutions. Journal of Business Venturing, 29(5), 668-686. https://doi.org/10.1016/j.jbusvent.2014.05.002
Freel, M. S. (2005). Patterns of innovation and skills in small firms. Technovation, 25(2), 123-134.
Glaeser, E. L., La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2004). Do institutions cause growth?. Journal of economic Growth, 9(3), 271-303. https://doi.org/10.1023/B:JOEG.0000038933.16398.ed
Goedhuys, M. (2007). Learning, product innovation, and firm heterogeneity in developing countries; Evidence from Tanzania. Industrial and Corporate Change, 16(2), 269-292. https://doi.org/10.1093/icc/dtm003
Goedhuys, M., Janz, N., & Mohnen, P. (2013). Knowledge-based productivity in “low-tech” industries: evidence from firms in developing countries. Industrial and Corporate Change, 23(1), 1-23. https://doi.org/10.1093/icc/dtt006
Goedhuys, M., & Sleuwaegen, L. (2010). High-growth entrepreneurial firms in Africa: a quantile regression approach. Small Business Economics, 34(1), 31-51. https://doi.org/10.1007/s11187-009-9193-7
Goedhuys, M., & Veugelers, R. (2012). Innovation strategies, process and product innovations and growth: Firm-level evidence from Brazil. Structural change and economic dynamics, 23(4), 516-529. https://doi.org/10.1016/j.strueco.2011.01.004
Greif, A. (2006). Family structure, institutions, and growth: the origins and implications of western corporations. American economic review, 96(2), 308-312. https://doi.org/10.1257/000282806777212602
Hair, J., Babin, B., Money, A., & Samouel, P. (2005). Fundamentos de métodos de pesquisa em administração. Bookman Companhia Ed.
Henisz, W. J. (2000). The institutional environment for economic growth. Economics & Politics, 12(1), 1-31. https://doi.org/10.1111/1468-0343.00066
Ireland, R. D., Hitt, M. A., & Sirmon, D. G. (2003). A model of strategic entrepreneurship: The construct and its dimensions. Journal of management, 29(6), 963-989. https://doi.org/10.1016/S0149-2063(03)00086-2
Kafouros, M., Wang, C., Piperopoulos, P., & Zhang, M. (2015). Academic collaborations and firm innovation performance in China: The role of region-specific institutions. Research Policy, 44(3), 803-817. https://doi.org/10.1016/j.respol.2014.11.002
Kamau, P., & Munandi, I. (2009). Innovation in the Kenyan Clothing Sector and Its Impact on Employment and Poverty Reduction. Institute for Development Studies, University of Nairobi, Nairobi, Kenya.
Kannebley Jr., S., Porto, G. S., & Pazello, E. T. (2005). Characteristics of Brazilian innovative firms: An empirical analysis based on PINTEC – industrial research on technological innovation. Research Policy, 34(6), 872-893. https://doi.org/10.1016/j.respol.2005.04.003
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2011). The worldwide governance indicators: methodology and analytical issues. Hague Journal on the Rule of Law, 3(2), 220-246. https://doi.org/10.1017/S1876404511200046
Lee, K., & Kang, S. M. (2007). Innovation types and productivity growth: Evidence from Korean manufacturing firms. Global Economic Review, 36(4), 343-359. https://doi.org/10.1080/12265080701694512
Mahoney, J. T. (1995). The management of resources and the resource of management. Journal of business research, 33(2), 91-101. https://doi.org/10.1016/0148-2963(94)00060-R
Nelson, R. R., & Nelson, K. (2002). Technology, institutions, and innovation systems. Research policy, 31(2), 265-272. https://doi.org/10.1016/S0048-7333(01)00140-8
North, D. C. (1990). Institutions, Institutional Change and Economic Performance. Cambridge, UK: Cambridge University Press.
North, D. C. (1991). Institutions. Journal of economic perspectives, 5(1), 97-112.
OECD. (2005). Oslo manual: Guidelines for collecting and interpreting innovation data (3rd ed). Paris: OCDE.
Olson, M., Sarna, N., & Swamy, A. V. (2000). Governance and growth: A simple hypothesis explaining cross-country differences in productivity growth. Public Choice, 102(3-4), 341-364. https://doi.org/10.1023/A:1005067115159
Papazoglou, M. E., & Spanos, Y. E. (2018). Bridging distant technological domains: A longitudinal study of the determinants of breadth of innovation diffusion. Research Policy, 47(9), 1713-1728. https://doi.org/10.1016/j.respol.2018.06.006
Rosenberg, N. (2010). Why do firms do basic research (with their own money)? In Studies On Science And The Innovation Process (pp. 225-234). Stanford University, USA: World Scientific. https://doi.org/10.1142/9789814273596_0011
Sirmon, D. G., Hitt, M. A., & Ireland, R. D. (2007). Managing firm resources in dynamic environments to create value: Looking inside the black box. Academy of management review, 32(1), 273-292. https://doi.org/10.5465/amr.2007.23466005
Solleiro, J. L., & Castañón, R. (2005). Competitiveness and innovation systems: the challenges for Mexico’s insertion in the global context. Technovation, 25(9), 1059-1070. https://doi.org/10.1016/j.technovation.2004.02.005
Szogs, A. (2008). The role of mediator organisations in the making of innovation systems in least developed countries: evidence from Tanzania. International Journal of Technology and Globalisation, 4(3), 223. https://doi.org/10.1504/IJTG.2008.020328
Tolstoy, D. (2009). Knowledge combination and knowledge creation in a foreign‐market network. Journal of Small Business Management, 47(2), 202-220.
Trevino, L. J., Thomas, D. E., & Cullen, J. (2008). The three pillars of institutional theory and FDI in Latin America: An institutionalization process. International Business Review, 17(1), 118-133. https://doi.org/10.1016/j.ibusrev.2007.10.002
Wang, J. (2018). Innovation and government intervention: A comparison of Singapore and Hong Kong. Research Policy, 47(2), 399-412. https://doi.org/10.1016/j.respol.2017.12.008
Wang, C. C., & Lin, G. C. (2012). Dynamics of innovation in a globalizing china: regional environment, inter-firm relations and firm attributes. Journal of Economic Geography, 13(3), 397-418. https://doi.org/10.1093/jeg/lbs019
Williamson, O. E. (2000). The new institutional economics: taking stock, looking ahead. Journal of economic literature, 38(3), 595-613. https://doi.org/10.1257/jel.38.3.595
World Bank. (2019). Enterprise Surveys. Recuperado de http://www.enterprisesurveys.org/data
Wu, J., & Park, S. H. (2019). The role of international institutional complexity on emerging market multinational companies’ innovation. Global Strategy Journal, 9(2), 333-353. https://doi.org/10.1002/gsj.1166
Downloads
Published
Métricas
Visualizações do artigo: 530 PDF (Português (Brasil)) downloads: 200 PDF downloads: 67
How to Cite
Issue
Section
License
Copyright (c) 2021 Christian Daniel Falaster, Priscila Rezende da Costa
This work is licensed under a Creative Commons Attribution 4.0 International License.
Authors who publish in this journal agree to the following terms:
-
The author(s) authorize the publication of the text in the journal;
-
The journal is not responsible for the opinions, ideas, and concepts expressed in the texts, as they are the sole responsibility of their authors;
-
Authors retain copyright and grant the journal the right of first publication, with the work published under the CC BY 4.0
License, which allows sharing the work with acknowledgment of authorship and initial publication in this journal; -
Authors are allowed and encouraged to post their work (Submitted version, Accepted version [Manuscript accepted by the author], or Published version [Record version]) online, for example in institutional repositories or preprints, as it can lead to productive exchanges as well as earlier and greater citation of published work. REGEPE requires that authors indicate/link the published article with DOI. See the Effect of Open Access.
