The effects of internal and external innovation strategies on process innovation in Vietnamese firms

Abstract

Purpose – This paper aims to investigate the antecedents of process innovation to provide more alternates for Vietnamese firms as they are still struggling to find an appropriate innovation strategy. Design/methodology/approach – The research analyzes the separate impacts of each innovation strategy on process innovation using logistic regression models. Data were collected using a stratified random sampling method. Findings – The results show that having an innovation strategy is good for innovation, regardless of whether the strategy is internal or external. Internal and external strategies are proved not complements but substitutes. However, the internal strategy seems to be most beneficial. Weak institutional settings further strengthen the importance of internal strategies, whereas strong institutional settings favor external strategies. Originality/value – This paper analyzes the impact of different innovation strategies on process innovation in Vietnamese firms using firm-level data. The findings strongly recommend that in weak institutional settings such as Vietnam, firms should focus on an internal strategy because the emphasis on external innovation strategies might be a western bias stemming from research in mostly strong institutional contexts.

Keywords

• Vietnam
• Institutional quality
• Process innovation
• Innovation strategies
• Firm level