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Is innovation activity persistent among small firms in developing countries? Evidence from Vietnam

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  • Trinh, Long

Abstract

Using firm-level panel data collected in Vietnam bi-annually from 2005 to 2013, this paper examines whether innovation is persistent among small firms in Vietnam. The empirical results obtained from dynamic random effect probit and dynamic random effect ordered probit show that the innovation activity is persistent among these small firms. Our estimation results also show slightly different roles of human capital of firm’s owner and employees in innovation activities. While the owner’s human capital is associated with creating a new product, employees’ human capital is positively correlated with upgrading the existing products or production procedure. However, we do not find evidence on the roles of unobserved heterogeneity in explaining this persistence. Our results are consistent with results found in the literature for firms in developed economies.

Suggested Citation

  • Trinh, Long, 2015. "Is innovation activity persistent among small firms in developing countries? Evidence from Vietnam," MPRA Paper 63767, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63767
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    References listed on IDEAS

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    More about this item

    Keywords

    Innovation; Persistence of Innovation; Unobserved heterogeneity; Dynamic Random Effect Probit Model; Dynamic Random Effect Ordered Probit Model; Small and Medium Enterprises; Vietnam;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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