Innovation in formal and informal firms in developing countries: Evidence from Côte d’Ivoire
Résumé
Limited empirical evidence is available on the determinants of innovation in informal firms, despite the importance of the informal economy in developing countries. This paper aims to filling this gap in the literature by estimating a Probit model to analyze data from a survey of 400 informal firms and 160 formal firms from Côte d’Ivoire. A new analytical framework is proposed by considering three forms of innovation: technological innovation only, non-technological innovation only, and innovation both technologically and non-technologically. We find that the determinants of firms’ decision to innovate differ from formal economy to informal economy, and from a form of innovation to another one, and make policy recommendations based on these results.