Internal innovations, foreign technology and productivity in Sub-Saharan Africa’s manufacturing
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Date
2022
Journal Title
Journal ISSN
Volume Title
Publisher
Research square
Abstract
Internal firm innovations and external knowledge/technology transfer are key for spurring the
growth of firms and economies. We investigate whether firms that engage in such innovations are
more likely to be productive than others as well determine if external knowledge transfers may
have an effect on labor productivity mediated by the existence of internal absorptive capacity
(generated by human capital and R&D). Using the World Bank Enterprise Survey of 26 African
countries and employing both OLS and 2SLS, we find that firms that engage in innovations
experience more growth. Most fundamentally, importation of inputs alone in the absence of other
innovations does not maximize firm productivity. Finally, firms with a higher absorptive capacity
in addition to the other innovations enjoy higher efficiency gains from their imported inputs
irrespective firm ownership and size. Government should pursue policies that enhance internal
absorptive capacity so as to enable firms tap the global opportunities.
Description
Keywords
Africa, Manufacturing firms, Human capital development, Productivity
Citation
BBAALE, E., Kilimani, N., Okumu, I. M., & Tumwebaze, H. (2022). Internal innovations, foreign technology and productivity in Sub-Saharan Africa’s manufacturing firms: The role of absorptive capacity.https://doi.org/10.21203/rs.3.rs-1645448/v1