Determinants of product innovation in food and agribusiness small and medium enterprises: evidence from enterprise survey data of India

Abstract

This paper analyzes the nature and determinants of product innovation for food and agribusiness firms in India. The study is based on the World Bank’s Enterprise Survey and the India Innovation Follow-up Survey from 2014. These surveys included 294 Indian food and agribusiness firms operating in different regions of the country. Simple statistical tools, such as chi-square test and logistic regression, are used for analyzing the raw data. It is evident from the analysis that there is a significant difference in the adoption of product innovations across enterprise sizes. Product innovation is more prominent in large enterprises than small and medium scale enterprises (SMEs). Results of regression analysis indicate that product innovation in SMEs is more likely to be influenced by a variety of internal, collaborative, and external factors. The findings of the study suggest that SMEs should diversify their product innovations to include new inputs, improved product features, and enhanced technologies to strengthen their place in the market. This research is valuable because there is limited evidence on the nature and determinants of product innovation in food and agribusiness SMEs of emerging economies like India.