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The main aim of this paper is to examine empirically the extent to which firm-specific action, innovation, and an external factor, the quality of regional institution, affect firms' productivity. To this end, a firm-level dataset from 15 African countries was used and the three-step CDM approach was employed to estimate the relationship. The empirical results of the study highlight that firms that invest in R&D are more innovative and innovative firms are more productive, indicating the importance of innovation for firms' productivity. In addition, regional institutional quality has a significant positive effect on productivity, particularly for firms at low productivity distribution. Therefore, improving the quality of regional institutions, in addition to promoting R&D and innovation, is essential to enhance the productive capacity of firms in Africa. The present study contributes to the existing literature by providing new empirical evidence on the role of regional/local institutions on firm productivity for a region, Africa, which needs productivity enhancement the most. It is also recommended that further studies, similar to this one, should be carried out in order to better understand the topic in the context of African firms. [ABSTRACT FROM AUTHOR]

The main aim of this study is to empirically examine the role of regional institutional quality, and compare the relative importance of three different institutional arrangements, namely regulatory quality, rule of law, and corruption, on propensity of firm innovation in African countries. To this end, we used the most recent World Bank Enterprise Survey (WBES) of firms from 19 African countries. Our empirical investigation using multilevel logistic regression has drawn three important conclusions. First, there is no significant relationship between firm-specific factors, such as age, ownership, and exporting, and firm innovation. Nonetheless, firms' propensity to innovate is significantly determined by the size of the firm, R&D expenditures, on-the-job training (OJT), and capability of managers/owners to adopt new technologies. Second, the innovation performance of firms is significantly affected by regional institutional quality. Third, among different regional institutional arrangements, reducing corruption and maintaining rule of law appeared to matter the most for firm innovation. [ABSTRACT FROM AUTHOR]

The present study concentrates on answering following questions: (i) Do firm's internal factors such as size, age, ownership, R&D spending, and exporting significantly predict the propensity of firms to engage in innovative activities in Ethiopia? (ii) Do firm's external factors, namely, access to finance and competition, significantly predict the propensity of firms to engage in innovative activities in Ethiopia? The data source of the paper is a survey conducted by World Bank in 2015 on Ethiopian firms. Then, the factors influencing the innovativeness of Ethiopian firms are analyzed by using a logistic regression model. Results obtained through logistic regression suggest that internal factors such as the size of the firms, education level of the employees, technology adoption capability of managers, on-job training, and R&D expenditures have a significant positive impact on both types of innovations, while private and foreign ownership were only found to be significant for process innovation. Estimations also showed that access to finance has a significant (positive) impact on product innovation and the impact of the competition level is significant (negative) only in terms of process innovation. Most importantly, we found that, disregarding their statistical significance, all explanatory variables influence both process and product innovation in the same direction, probably because of the positive correlation between the two. [ABSTRACT FROM AUTHOR]