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Survival and Growth
from Part I - The Nature and Domestic Sources of Innovation in Africa
Published online by Cambridge University Press: 27 November 2020
Over the years, data unavailability has limited the empirical analysis of the relationship between innovation and firm growth, leading to the partial understanding of this relationship in low-income countries. This chapter fills these gaps by using a unique firm-level data to estimate the effect of technological and non-technological innovations on firm productivity in Ghana. The econometric estimations show innovation as an important determinant of labour productivity, for both formal and informal firms. Our results also suggest that technological innovation leads to higher labour productivity than non-technological innovation. New policy thinking and policies are needed to recognize, support and enhance the innovation activities in both formal and informal firms, by mitigating critical constraints such as financial and labour skill constraints formal and informal firms both face.
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