In this paper we analyse the impact of different sources of knowledge on product innovation in Tanzania using firm level data from 543 firms. Specifically, we assess the separate impacts of internal knowledge and external knowledge and the combined impact of both on a firm’s likelihood of introducing product innovations. The analysis reveals that external research and development do not affect product innovation and the combined effect of internal and external knowledge on product innovation is greater than the separate effect of these types of knowledge on product innovation. Furthermore, external knowledge acquisition and firm spending on internal research and development facilitates product innovation more effectively for older firms and firms in the services sector than for relatively younger firms and firms in the manufacturing sector. Finally, interaction of external and internal knowledge raises the probability of a firm undertaking product innovation.
Osoro, O.; Kahyarara, G.; Knoben, J.; Vermeulen, P.A.M. Effect of Knowledge Sources on Firm Level Innovation in Tanzania. Tilburg University, Tilburg, Netherlands (2015) 24 pp.