Entrepreneurship, Innovation and Enterprise Development in Developing Countries

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    Project Manager :
    Micheline Goedhuys

    This research project aims at studying the factors driving enterprise development in developing countries, with a focus on Africa. In particular, it analyses the impact of a set of relevant firm, industry and institutional factors on the performance of firms. Various performance indicators, such as productivity, sales growth, employment creation and export performance are studied. The project takes advantage of the increasing wealth and availability of micro-evidence, such as e.g. the harmonised firm surveys of the World Bank Enterprise Surveys, which allow to tackle these questions in detail and to compare the relationships across countries at different levels of development.

    The major areas of research include:

    Entrepreneurship and (high-) growth of firms : entrepreneurship, i.e. the creation and development of businesses, is widely viewed as a process generating employment, income and economic development and a driver of growth. However, empirically, the creation of new businesses is not linked to higher economic growth as many developing countries, and African countries in particular, still have large informal economies, where turnover of micro-businesses is overwhelming. The conditions leading to dynamic entrepreneurship, high growth and quality employment creation of firms are the subject of this research area. Entrepreneur, firm and industry characteristics, as well as, institutional factors, are used to investigate the chances of high growth and employment creation.

    Innovation and productivity : involves the analysis of the innovation strategies of firms, including the relative importance of several kinds of innovation activities and technology variables, learning and linkages; explores cross-country productivity differentials, identifies key constraints to raising productivity of firms in different countries and relates them to innovation, policy variables and the business environment.

    Quality standards, management practices and firm performance: standards have gained more and more weight in international trade and the governance of global value chains. Standards are not limited to technical product specifications, but increasingly extend to processes and generic management systems (eg. ISO 9000). The inability of developing country firms to implement management practices that conform to these world standards is a barrier to enter global markets. This research investigates the innovative efforts that accompany standards accreditation, measures the effect of accreditation on firm productivity, growth and export performance, assesses the institutional setting in which accreditation is most important, and draws implications for policy intervention.