Innovation, external technological environment and the total factor productivity of enterprises. (17th March 2021)

• Record Type: Journal Article
• Authors: Xiao, Zumian; Peng, Hongfeng; Pan, Zheyao
• Is Part Of: Accounting and finance. Volume 62:Number 1(2022)
• Page Start: 3
• Page End: 29
• Publication Date: 2021-03-17
• Subjects: R&D -- Innovation -- Technological environment -- Total factor productivity; Accounting -- Periodicals; Finance -- Periodicals; 657.05
• DOI: 10.1111/acfi.12779
• Languages: English
• ISSNs: 0810-5391

Abstract

Abstract: In this paper, we study the impact of endogenous innovation and the external technological environment on total factor productivity. We first develop an endogenous growth model and derive a testable empirical model. We then estimate the empirical model based on the World Bank's worldwide enterprise survey data for 119 countries spanning 2007–2017. Our results suggest that: (i) enterprises' R&D activity increases their total factor productivity; (ii) a higher level of external technology weakens the impact of the R&D activity on total factor productivity; and (iii) enterprises located in low‐ and middle‐income countries often lack continuous innovation.