The impact of access to credit on process innovation

Heritage and Sustainable Development

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Title The impact of access to credit on process innovation
Creator Aidoo, Abdul Wahab
Description The effectiveness of a firm mostly depends on the capability of the managers to obtain flexible credits for the implementation of sustainable innovations. The aim of this study is focused on the impact of access to credit on process innovations in SMEs. Data from the manufacturing and the service sectors of the economies of Africa and the Middle East are collected from the World Bank’s Enterprise Survey database. The survey employs random sampling to select firms in each country and they are stratified based on the number of employees. The sampled observations are scaled down from 136,887 to 33,977 firms covering 53 countries due to the scope of this research. The factors of access to credit are the independent variables of this research: the working capital from a commercial bank, overdraft facility, lines of credit, external auditing of accounts, and working capital from suppliers. The dependent variable is process innovation. The results show that there are significance levels of p-values below 1% although some of the Pearson correlation coefficients of the independent variables with the dependent variable are not too high. The factors of access to credit used in the regression model have a significant impact on process innovation. The findings from the analysis help the policy directions of managers.
Publisher Research and Development Academy - ARDA
Date 2019-12-23
Type info:eu-repo/semantics/article
Peer-reviewed Article
Format application/pdf
Source Heritage and Sustainable Development; Vol. 1 No. 2 (2019); 48-63
Language eng
Rights Copyright (c) 2019 Heritage and Sustainable Development, ISSN 2712-0554

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