Macro barriers to business and innovation in developing economies: evidence from Egyptian, Moroccan, and Tunisian SMEs

ABSTRACT

Investing in knowledge and innovation is recognised as a key driver of economic growth in any country. This paper contributes to the thin literature on innovation determinants in developing economies by empirically examining the impact of macro-level obstacles to business on small and medium-sized enterprises’ innovations in three Arab countries, namely, Egypt, Morocco, and Tunisia. While R&D emerged as the main factor that impacts positively and significantly the likelihood that firms innovate and succeed in producing a diverse set of product and process innovations, different combinations of other factors proved to affect innovation in each of the three countries.

RÉSUMÉ

Investir dans les connaissances et l’innovation est considéré comme un levier essentiel de la croissance économique dans tout pays. Cet article contribue à la littérature limitée sur les déterminants de l’innovation dans les pays en voie de développement, en testant empiriquement l’impact des obstacles macro aux affaires sur les innovations développées par les petites et moyennes entreprises dans trois pays arabes, à savoir, l’Égypte, le Maroc, et la Tunisie. Alors que la R&D s’est distinguée comme facteur essentiel affectant de façon positive et significative la probabilité que ces entreprises innovent et réussissent à produire une variété d’innovations de produits et de procédés, des combinaisons différentes d’autres facteurs se sont avérées impactantes dans chacun des trois pays.

KEYWORDS:

• Innovation
• barriers
• Egypt
• Morocco
• Tunisia

Acknowledgements

The authors gratefully acknowledge the valuable comments and constructive feedback received from the Canadian Journal of Development Studies’ anonymous reviewers.

Notes

1 Following the European Commission, SMEs is used to designate firms employing less than 250 employees.

2 See Becheikh, Landry, and Amara 2006 for a comprehensive review.

3 See www.enterprisesurveys.org/en/methodology for more details on the WBES methodology.

Additional information

Notes on contributors

Nizar Becheikh

Nizar Becheikh is Associate Professor of Strategy and Innovation Management and former Dean at the School of Business of the American University in Cairo (Egypt). He earned a Ph.D. in Business Administration and a MBA in International Management from Laval University (Canada). His current research interests focus on political economy in the Arab region, innovation paths and best practices in developing countries, and managing growth and innovation in small and medium-sized enterprises in Arab countries.

Mohammed Bouaddi

Mohammed Bouaddi is Associate Professor in Economics and director of graduate programmes in Economics at the American University in Cairo (Egypt). His research focuses primarily in applied econometrics with specialties asset pricing, time series analysis, and financial economics. He has published papers in refereed journals involving applications of econometric methods in the fields of portfolio selection, macro-finance and corporate finance. His current research interest is in the econometrics of factor models.