The effects of informal competition on firms’ innovation in Greece

Vasileios Vlachos
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Abstract

Purpose Several empirical studies indicate that the existence of a large informal sector is a major obstacle to firms’ choices of innovation strategies. This paper aims to address this issue and investigates the effect of the informal sector on the innovation of formal firms in Greece. Design/methodology/approach Using the World Bank’s Enterprise Survey data, the impact of informal competition on formal firms’ innovation in Greece is investigated by testing whether formal firms use innovation as a tool to protect and sustain their competitive advantage vis-à-vis informal firms and whether overall and informal competition has an inverted-U relationship with the innovation of formal firms. The effects of bribing and other variables drawn from the empirical literature are also controlled for. Findings The findings fill a gap in the literature regarding the effects of the informal sector on formal economic activity in Greece, by indicating that the informal sector puts pressure on formal firms to innovate, in order to differentiate their product or service and enhance their productivity and by offering learnings to help policymakers to promote innovation in Greece. Originality/value The originality of this study is that it investigates the impact of informal competition on formal firms’ innovation in Greece, a developed economy with a large informal sector. It does so by focusing on the effects that formal firms’ informal practices have on their competitors’ innovation activities, and the role of informal competition in creating and sustaining a competitive advantage in Greece.
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非正式竞争对希腊企业创新的影响
目的多项实证研究表明,大量非正规部门的存在是企业选择创新战略的主要障碍。本文旨在解决这一问题,研究非正规部门对希腊正规企业创新的影响。设计/方法/途径利用世界银行的企业调查数据,通过检验正规企业是否将创新作为保护和维持其相对于非正规企业的竞争优势的工具,以及总体竞争和非正规竞争是否与正规企业的创新呈倒 U 型关系,研究非正规竞争对希腊正规企业创新的影响。研究结果填补了有关希腊非正规部门对正规经济活动影响的文献空白,表明非正规部门对正规企业的创新施加了压力,从而使其产品或服务与众不同并提高其生产率,同时还提供了有助于政策制定者在希腊促进创新的经验。研究重点是正规企业的非正规做法对其竞争对手创新活动的影响,以及非正规竞争在希腊创造和维持竞争优势方面的作用。
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来源期刊
International Journal of Development Issues
International Journal of Development Issues Social Sciences-Political Science and International Relations
CiteScore
2.90
自引率
0.00%
发文量
20
期刊介绍: The International Journal of Development Issues (IJDI) publishes scholarly research on important development issues, with a particular focus on development dynamism and a leaning towards inter-disciplinary research. IJDI welcomes papers that are empirically oriented but such work should have solid methodological foundations based on realism and pragmatism rather than on idealism. Critical analysis of development issues from both the heteredox viewpoint and the neo-liberalist viewpoint, in orthodox tradition, are equally encouraged. The journal publishes authoritative, intelligent articles and research of direct relevance to those investigating and/or working within areas closely associated with development processes. Special consideration is given to research papers that consider development issues from either a socio-economic, political, historical or sociological, anthropological, ecological and technological standpoint.
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