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

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  • Samuel Kwesi Dunyo

    (Faculty of Social Sciences and Humanities, Nakhon Sawan Rajabhat University, Nakhon Sawan 60000, Thailand)

  • Samuel Amponsah Odei

    (Department of Economics, University of Hradec Králové, 50003 Hradec Králové, Czech Republic)

Abstract

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.

Suggested Citation

  • Samuel Kwesi Dunyo & Samuel Amponsah Odei, 2023. "Firm-Level Innovations in an Emerging Economy: Do Perceived Policy Instability and Legal Institutional Conditions Matter?," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:2:p:1570-:d:1034974
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    Cited by:

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    2. Nina Petrukha & Oleh Nazukov, 2024. "Human Capital in the Post-War Recovery of the Energy Industry," Oblik i finansi, Institute of Accounting and Finance, issue 2, pages 140-149, June.

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    More about this item

    Keywords

    technological innovations; non-technological innovations; business environment; corruption; legal institutions; foreign technology licenses; Thailand; ; L62; 030; 031; 036; P37; P48;
    All these keywords.

    JEL classification:

    • L62 - Industrial Organization - - Industry Studies: Manufacturing - - - Automobiles; Other Transportation Equipment; Related Parts and Equipment
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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