Micheline Goedhuys

Growth of firms in developing countries, evidence from Cote d'Ivoire

The paper presents evidence in support of a particular growth process of firms that is consistent with a missing middle in the size distribution of manufacturing firms in African countries. Firm growth is explained by size and age effects as a result of efficiency exploiting through scale enlargements and learning, but is strongly moderated by reputation effects and formal legitimation which facilitate access to output markets and resources. Complementing the model with data on growth obstacles as perceived by the owners of firms, medium sized firms are found to be strongly hurt by insufficient access to infrastructure and financial services.

Entrepreneurship, Innovation, and Economic Development

Entrepreneurship and innovation are two of the most pervasive concepts of our times, yet there are still gaps in our understanding of the interactions between entrepreneurship and innovation, particularly in developing countries. This book is an attempt to fill this gap. It focuses on the entrepreneurship-innovation-development nexus, drawing heavily on empirical evidence from developing countries. Cross-country and individual country experiences cover nations as diverse as Ethiopia, India, Turkey, Vietnam, and also examine lessons from advanced economies such as Finland. Three sets of questions are addressed. What is the impact of entrepreneurship and innovation on growth and development? What determines the innovative performance of entrepreneurs in developing countries? What role does the institutional environment play in shaping the extent and impact of innovative activities? A key message is that entrepreneurial innovation, whether through small firms, large national firms, or multinational firms, is often vibrant in developing countries, but does not always realise its full potential. This is due to institutional constraints, the absence of the appropriate mix of different types of small and large and domestic and foreign firms, and insufficiently developed firm capabilities. The contributions provide a better understanding of the determinants and impacts of innovation in developing countries and the policies and institutions that support or hinder innovation. Contributors to this volume - Adam Szirmai, UNU-MERIT and Maastricht University Wim Naude, UNU-WIDER Micheline Goedhuys, UNU-MERIT and Maastricht University David B. Audretsch, Indiana University Mark Sanders, Utrecht University Alice H. Amsden, Massachusetts Institute of Technology Erik Stam, Utrecht University Andre van Stel, University of Amsterdam. Jaap Voeten, University of Tilburg Job de Haan, University of Tilburg Gerard de Groot, University of Tilburg Mulu Gebreeyesus, UNU-MERIT Elif Bascavusoglu-Moreau, Imperial College Business School Otto Toivanen, Helsinki School of Economics Sunil Mani, Centre for Development Studies, Trivandrum, Kerala I. Semih Akcomak, UNU-MERIT, Maastricht University Suma Athreye, Brunel University

High-growth versus declining firms: the differential impact of human capital and R&D

ABSTRACT We provide evidence that both human capital and R&D increase the likelihood that a firm will be a high-growth firm in the industry. However, different from human capital, being an R&D active firm also increases the probability of substantial decline or failure, underscoring the risky nature of innovation. Quantile regression results show that, different from R&D, human capital is growth-enhancing for all firms, hence also those located in the lower quantiles of the distribution of growth rates across firms.

Drivers of productivity in Vietnamese SMEs: The role of management standards and innovation

ABSTRACT Using a rich panel dataset of small and medium scale manufacturing enterprises (SMEs) active in the manufacturing sector in Viet Nam, this paper investigates the drivers of firm productivity, focusing on the role played by international management standards certification. We test the hypothesis that, accounting for technological innovation (product and process) and other variables related to technological capabilities, international standards are conducive to higher productivity, through improved management practices and business organization. In line with the requirement of continuous improvement implied by most international standards, the main findings show that the possession of an internationally recognized standard certificate leads to significant productivity premium. We further find that the effect of certification on productivity is particularly strong for firms with technological innovation, located in southern provinces, and operating in more scale-intensive industries.