Trademark and product innovation: the interactive role of quality certification and firm-level attributes

ABSTRACT

The study examines how quality certification and firm-level attributes (firm age and size) support firms’ innovative ecosystems that use trademarks in developing countries. The study combines data from the World Bank Enterprise Survey (WBES) and Innovation Follow-up Surveys (IFS) for 11 countries to test the hypotheses. The estimations are performed using an instrumental variable treatment model with direct-2sls for the primary analysis and a Tobit model for the robustness checks. Our findings indicate a positive effect of quality certification and trademark on product innovation. There is a synergistic effect of quality certification and trademark on product innovation. Similarly, firm age and size significantly and positively moderate the link between a trademark and product innovation. Interestingly, in the multi-level estimations, we still find the synergistic effect of quality certification and trademark on product innovation to hold. Our findings provide accommodating arguments for the complementary utilization of trademark and quality certification to support the focal firms’ product innovation. The results also show that firm-level attributes (firm age & size) constitute essential elements for firms to gain from a trademark possession to enhance performance.

KEYWORDS:

• Product innovation
• trademark
• quality certification
• firms’ age
• and firms’ size

Acknowledgements

The authors are grateful for comments received from Andreas Freytag, Michael Wyrwich, Thomas Kuhn, and Erika Kraemer-Mbula, including the editor and two anonymous reviewers. SKM duly acknowledges funding from Open African Innovation Research. Open AIR is carried out with financial support from the International Development Research Centre, Canada, the Social Sciences and Humanities Research Council of Canada, UK Department for International Development, and Queen Elizabeth Scholars’ Program. The views expressed herein do not necessarily represent those of Open AIR's funder.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 In order to account for endogeneity concerns using the percentage of main innovative products & services, we perform another estimation using ivtobit with the same set of variables as Table 5. The results are similar except for the quality certification*trademark in the multilevel analysis (See Table A4 in the appendix). As observed in the ivtreatreg and ivtobit estimations, probably missing values in some of the variables used as instruments account for the drop in observations by 67 in the ivtobit and 25 in the ivtreatreg estimations, respectively. This does not pose a concern to our estimations because our models are fitted.

2 This indicates significant change or improvement on the existing firms’ trademark or logo.

Additional information

Funding

SKM duly acknowledges funding from Open African Innovation Research (Open AIR). Open AIR is carried out with financial support from the International Development Research Centre, Canada, the Social Sciences and Humanities Research Council of Canada, UK Department for International Development, and Queen Elizabeth Scholars’ Program.