Management Quality and Innovation in Emerging Countries
Management Quality and Innovation in Emerging Countries

Author(s): Oleg Sidorkin
Subject(s): Social Sciences, Economy
Published by: Vysoká škola ekonomická v Praze
Keywords: Management quality; R&D; product innovation; emerging countries
Summary/Abstract: Purpose:I study the impact of management quality on R&D propensity (innovation input), R&D spending (innovation intensity) and new product introduction (innovation output) of firms in ten emerging countries. I analyze whether the measures of innovation are associated with the quality of four different management practices. Design/methodology/approach:I use data on about 1,400 firms from the Management, Organization and Innovation (MOI) Survey (2008 –2010) by the European Bank for Reconstruction and Development (EBRD) and the World Bank. The effects are estimated using a two-part model, which combines logistic and generalized linear models. Findings: I find that an improvement in management quality from the 25thto 50thpercentile is associated with a 3.3 percentage point increase in the propensity to invest in R&D. Furthermore, there are positive but weak effects of management quality on product innovation. The empirical results for individual management practices show that the quality of incentive management is connected with innovation performance. The quality of monitoring and incentives management is related to higher inputs into innovation, but not to innovation output. All results hold after controlling for differences in management quality by industries. Research/practical implications:In emerging countries, the quality of monitoring and incentive management practices is especially important for R&D propensity and R&D intensity. While the role of monitoring for new product introduction is weak, incentive management quality has sizable effects. As the study covers emerging countries, the findings may be of particular importance for emerging economies aiming to promote successful innovation. Originality/value: This paper explicitly focuses on connections between the quality of aggregate management and individual management practices and innovation (input and output) in emerging countries. The empirical analysis presented in the paper helps to explain whether management quality, associated with firms’ operations, affects R&D propensity, R&D intensity and introduction of new products.

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