Structural characteristics and organizational determinants as obstacles to innovation in small developing countries

Abstract

This paper aims to analyse the influence of structural characteristics and organizational determinants on the perception of obstacles to innovation in small developing countries. The study focuses on the interaction between these specific elements with important implications for both innovation policy and innovation management in the context of small emerging economies, which are generally characterized by financial and market constraints, weak institutional framework and low innovation performance. The empirical analysis is based on panel data of 5447 Ecuadorian firms from the National Survey of Innovation Activities for the periods 2009–2011 and 2012–2014. In contrast with the existing literature, which often analyses separately the influence of variables such as firm size or engagement in innovation activities on obstacles to innovation, this paper uses a nonlinear probability model to a better understanding of the interaction between both variables. In general, results show a greater perception of the obstacles as the size of the company decreases, across all the different levels of innovation activity. This result is observed for all obstacles to innovation, but is especially clear and straightforward for knowledge and economic barriers. When considering small firms, interaction between firm size and engagement in innovation activities reveals the existence of a learning effect based on one's own innovation effort and experience, which contributes to overcoming difficulties. These results suggest that actions focused on small organizational structures that aim to improve access to new sources of knowledge and optimise the availability and use of economic resources can contribute to channelling this innovation proactivity towards concrete innovations.