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ICT adoption, competition and innovation of informal firms in West Africa: a comparative study of Ghana and Nigeria

Alhassan Abdul-Wakeel Karakara (Department of Economics, University of Cape Coast, Cape Coast, Ghana)
Evans Osabuohien (Department of Economics and Development Studies, Covenant University, Ota, Nigeria, and Centre for Economic Policy and Development Research (CEPDeR), Covenant University, Ota, Nigeria)

Journal of Enterprising Communities: People and Places in the Global Economy

ISSN: 1750-6204

Article publication date: 24 June 2020

Issue publication date: 14 July 2020

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Abstract

Purpose

This study aims to investigate how ICT adoption enhances the innovativeness of informal firms in West Africa, using the cases of Ghana and Nigeria.

Design/methodology/approach

The study used the World Bank Enterprise Survey data 2014 for Ghana and Nigeria with binary logistic regression analysis to achieve this. Four different innovations are modelled. They include: first, whether a firm has innovated based on producing a new product or significantly improved product; second, whether a firm has innovated in its methods of production or services; third, whether a firm has innovated in terms of its organisational structure; and fourth, whether a firm has introduced a new and improved marketing method.

Findings

The results show that the use of email, cellphone and website has a positive impact on the four types of innovations modelled. However, these effects varied markedly between Ghana and Nigeria. Firms’ spending on research and development (R&D), firm giving its employees the chance to develop their ideas and when firm competes with others; all positively impact the four types of innovations. Thus, the study recommends that policies should be geared towards making firms have more access to ICTs to enable them to be more innovative to serve clients and the economy.

Originality/value

This study differs by concentrating on how the adoption of ICTs could help firms to introduce innovations into their companies in two West African countries, namely, Ghana and Nigeria. Thus, it complements literature on informal firms’ innovation efforts in West Africa.

Keywords

Acknowledgements

This paper is a product of the African Finance and Economics Association (AFEA)’s Mentorship Programme. Thus, the authors appreciate the cross-fertilisation of ideas received from the platform. The second author acknowledges the Alexander von Humboldt Foundation for supporting his visiting research fellowship at Faculty of Management and Economics, Witten/Herdecke University, Witten, Germany [Ref: 3.4–1147508-NGA-GF-P] as well the Equipment Subsidy Grant [REF: 3.4–8151/19047] to Centre for Economic Policy and Development Research (CEPDeR), Covenant University that facilitated the revision of the paper. The authors are grateful.

Citation

Karakara, A.A.-W. and Osabuohien, E. (2020), "ICT adoption, competition and innovation of informal firms in West Africa: a comparative study of Ghana and Nigeria", Journal of Enterprising Communities: People and Places in the Global Economy, Vol. 14 No. 3, pp. 397-414. https://doi.org/10.1108/JEC-03-2020-0022

Publisher

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Emerald Publishing Limited

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