Firm Innovation in Emerging Markets: The Role of Firm Experience, and Institutions

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Innovation is essential in the development of emerging market economies. Innovation can be a striving force in the development of productivity and economic growth. On a firm-level innovation may strive with the right intangible resources. This study investigates whether firm experience determines firm innovation in emerging markets. Additionally, the study includes institutional theory, arguing a direct effect of institutions on firm innovation and a moderation effect between firm experience and firm innovation. The study uses secondary data from the World Bank Enterprise Survey from the year 2014 for Nigeria, Malawi and Namibia. The initial findings show that formal institutional quality has a direct effect on firm innovation. In contrast, informal institutions have a negative effect on firm innovation. The argued main effect that firm experience determines firm innovation could not be proven. No moderation effects were found between formal institutional quality and informal institutional quality on firm experience.
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