Innovation activities in developing countries

UNCG Author/Contributor (non-UNCG co-authors, if there are any, appear on document)
Md Rashedur Rahman Sardar (Creator)
The University of North Carolina at Greensboro (UNCG )
Web Site:
Albert N. Link

Abstract: Innovation is crucial for a country’s economic growth and development as it stimulates productivity and enhances the competitiveness of the firms. R&D investments are one of the most significant inputs to a firm’s ability to innovate. Many studies of firms in developed countries have verified the R&D to innovation relationship; however, there is a void in the literature of studies focusing on the R&D to innovation relationship in developing countries. This dissertation explores and compares the effect of R&D relationships among firms in two developing countries: Bangladesh and Malaysia. Using probit models, I estimate the marginal effect of R&D on the likelihood of a firm being innovative. I find that R&D affects Bangladeshi firms’ innovative behavior more than Malaysian firms. This finding is consistent with the law of diminishing marginal returns and the theory of economic convergence. Namely, this finding implies that after reaching a certain optimum level of innovative capacity, an additional level of R&D input can produce a smaller increase in innovation output, which happens to Malaysian firms. Additionally, the study also finds that larger-sized firms are more innovative. The dissertation concludes with some policy suggestions for Bangladesh’s public sector to consider for the country to be more innovative.

Additional Information

Language: English
Date: 2022
Bangladesh, Competitiveness, Firm Size, Innovation, Malaysia, R&D
Technological innovations $z Developing countries
Economic development $z Developing countries
Competition $z Developing countries

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