Does economy wide knowledge spillover determine firm level process innovation

Abstract

Purpose

The purpose of this study is to see how the economy-wide spillover effect affects company process innovation.

Design/methodology/approach

To account for national differences, the current study used a hierarchical model.

Findings

The findings of this study show that knowledge spillover is related to and influences the innovation process of businesses. Only a level two study that takes into account country-specific differences may reveal this. The current work uses a hierarchical model to try to capture knowledge spillover. Furthermore, the findings suggest that medium and large businesses, as well as businesses conducting research and development (R&D), are more inventive than small businesses and firms not conducting R&D. Furthermore, female-owned businesses are more likely than their male counterparts to innovate their processes.

Originality/value

This study is unique in that it makes predictions about how businesses innovate (behave) based on firm-level characteristics, or macroeconomic structure, without sacrificing information and variance. Furthermore, this study attempts to solve the difficulty of prior empirical research’s single-level analysis and cross-level inference. The research is based on data from the 2019 World Bank regular Enterprise Survey, which includes 18,148 businesses from 38 countries.

Citation

Wedajo, A.D., Berhe, M.W. and Xiao, H. (2022), "Does economy wide knowledge spillover determine firm level process innovation", Nankai Business Review International, Vol. 13 No. 2, pp. 266-288. https://doi.org/10.1108/NBRI-02-2021-0010