HOW BARRIERS INFLUENCE FIRMS’ SEARCH STRATEGIES AND INNOVATIVE PERFORMANCE

Abstract

This paper contributes to intellectual discourse on the impact of barriers to firms’ innovative performance and external search strategies in the context of a developing country. Using data from the 2011 Nigeria’s innovation survey in the manufacturing sector, we tested three hypotheses: the relationship between barriers and firms’ innovativeness, breadth and depth of external knowledge sources. We found that firms’ innovativeness can decrease when they encounter a broad range of organisational rigidities. On the contrary, firms’ innovativeness increase in the face of regulatory constraints as firms may evolve ways to circumvent problematic bureaucracies while expectedly, as knowledge and infrastructure barriers become more intense, firms find it difficult to implement innovations. Similarly, we found that higher intensity of barriers, particularly knowledge and infrastructure barriers is associated with lower breadth of search. Hence, our results underscore the importance of regulation and infrastructure as key requirements for enhancing not only firm-level innovation but also knowledge search activities of firms.