Research Article

Empirical analysis of innovation and productivity in services firms: The case of South Africa

Published in: African Journal of Science, Technology, Innovation and Development
Volume 15 , issue 1 , 2023 , pages: 1–13

DOI: 10.1080/20421338.2021.2001207

Author(s): Atoko Kasongo Centre for Science Technology and Innovation Indicators, Human Science Research Council, South Africa , Moses Sithole Centre for Science Technology and Innovation Indicators, Human Science Research Council, South Africa , Yasser Buchana Centre for Science Technology and Innovation Indicators, Human Science Research Council, South Africa

Keywords: productivity , innovation , services , innovation survey , O12 , O14 , O31 , O33 , O40

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Abstract

The purpose of this paper is to investigate the impact of innovation on productivity in the services sector firms in South Africa. Using a three-stage econometric model we find that service sector firms are innovative. We show that firm size, public financial support, patent protection and market sources of information have a positive impact on the decision to innovate. The level of investment in innovation significantly influences the success of both technological and non-technological innovations in service sector firms. The results find that both technological and non-technological innovations have a positive impact on labour productivity, with a greater impact from non-technological innovation.

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