Main Article Content
Innovation contributes to improved labour productivity and an enhanced competition, thereby ensuring to the development of the firm. However, small and medium enterprises (SMEs) encounter many difficulties in attempts to innovate. It is not clear whether globalisation works to encourage firms to innovate via transferring knowledge and promote market competition mechanism; or whether it works against such innovation due to a negative impact on the diversification of different dimensions in economic, social, and political life. The primary purpose of this research was to examine how globalisation affects innovation among SMEs in Vietnam. It analyses the micro and macro effects of globalisation on innovation in businesses using a Probit model with data obtained from selected SMEs during the period 2005–2015. The result showed that at a macro level, globalisation negatively correlates with innovation. Additionally, it was found that economic and political globalisation facilitates innovation while social globalisation discourages it. At the micro level, increasing competitive pressure and knowledge transfer due to globalisation are positively correlated with the propensity towards innovation of SMEs.
This work is licensed under a Creative Commons Attribution 4.0 International License.
Aldaba, R. M. (2011). Trade reforms, competition, and innovation in the Philippines. In C. H. Hahn, & D. Narjoko (Eds.), Globalization and innovation in East Asia. ERIA Research Project Report, 2010-04, pp. 315–340. Jakarta: ERIA.
Arrow, K. (1962). Economic Welfare and the Allocation of Resources for Invention, in R. Nelson (ed.) The rate and direction of inventive activity, Princeton University Press, 609–625.
Becheikh, N., Landry, R., & Amara, N. (2006). Lessons from innovation empirical studies in the manufacturing sector: A systematic review of the literature from 1993–2003. Technovation, 26, 644–664.
Beroc, M. A. (2015). ‘Does gender matter for the innovativeness of SMEs?’, FREE Policy Brief Series.
Bertschek, I. (1995). Product and process innovation as a response to increasing imports and foreign direct investment. The Journal of Industrial Economics, 43(4), 341–357.
Bloom, D. (2002). Mastering globalization: From ideas to action higher education reform, Unpublished paper.
Bordo, M. D., Eichengreen, B., Irwin, A. D., Frankel, J., & Taylor, M. A. (1999). Is globalization today really different than globalization a hundred years ago, NBER Working Paper No. W7195
Braga, H., & Willmore, L. (1991). Technological imports and technological effort: an analysis of their determinants in Brazilian firms. The Journal of Industrial Economics, 421–432.
Caselli, M. (2012). Trying to measure globalization, experiences, critical issues and perspectives. Springer Briefs in Political Science.
Caselli, M. (2006). On The Nature of Globalization and Its Measurement. Some Notes on The A.T. Kearney /Foreign Policy Magazine Globalization Index and The CSGR Globalisation Index. (Working Paper No. O-2006/3)
Chen, V. Z., Li, J., Shapiro, D. M., & Zhang, X. (2014). Ownership structure and innovation: an emerging market perspective. Asia Pacific Journal of Management, 31(1), 1–24.
Choi, S. B., Lee, S. H., & Williams, C. (2011). Ownership and firm innovation in a transition economy: Evidence from China. Research Policy, 40(3), 441–452.
Choi, S. B., Park, B. I., & Hong, P. (2012). Does ownership structure matter for firm technological innovation performance? The case of Korean firms. Corporate Governance: An International Review, 20(3), 267–288.
CIEM (2016). Characteristics of the Vietnamese business environment: Evidence from an SME survey in 2015, Hanoi.
Cicea C., Popa I., Marinescu C., & Stefan S. (2019). Determinants of SMEs’ performance: Evidence from European countries. Economic research-ekonomska istrazivanja, 32(1), 1602–1620.
Clark, W. C. (2000). Governance in a Globalizing World, Environmental Globalization, 86–108. Brookings Institution Press.
Coad, A., Segarra, A., & Teruel, M. (2016). Innovation and firm growth: Does firm age play a role? Research Policy, 45(2), 387–400.
Danaeefard, H., & Abbasi, T. (2011). Globalization and global innovations. In the P. Pachura (Eds.), The systemic dimension of globalization. IntechOpen.
Deschryvere, M. (2014). R&D, firm growth and the role of innovation persistence: An analysis of Finnish SMEs and large firms. Small Business Economics, 43(4), 767–785.
Dreher, A. (2006). Does globalization affect growth? Evidence from A New Index of Globalization. Applied Economics, 38(10), 1091–1110.
Dreher, A., Gaston, N., & Martens, P. (2008). Measuring globalisation - gauging its consequences. New York: Springer
El Elj, M., & Abassi, B. (2014). The determinants of innovation: An empirical analysis in Egypt, Jordan, Syria and Turkey. Canadian Journal of Development Studies/Revue Canadienne D’études Du Développement, 35(4), 560–578.
EMCDDA (2016). EU drug markets report. In-depth analysis. European Monitoring Centre for Drugs and Drug Addiction.
Figge, L., & Martens, P. (2014). Globalisation continues: The Maastricht globalisation index revisited and updated. Globalizations, 7731(April), 1–19.
Gallhofer, S., & Haslam, J. (2006). The accounting–globalisation interrelation: An overview with some reflections on the neglected dimension of emancipatory potentiality. Critical Perspectives on Accounting, 17(7), 903–934.
Ghemawat, P., & Altman, S. A. (2016). DHL global connectedness index 2016 - The State of Globalization in an Age of Ambiguity.
Gorg, H., & Greenaway, D. (2004). Much ado about nothing? do domestic firms really benefit from foreign direct investment?. World Bank Research Observer, 19(2), 171–197.
Gorodnichenko, Y., Svejnar, J., & Terrell, K. (2010). Globalization and innovation in emerging markets. American Economic Journal: Macroeconomics, 2(2), 194–226.
Grossman, G., & Helpman, E. (1991). Innovation and Growth in the Global Economy. MIT Press.
Gygli, S., Haelg, F., Potrafke, P., & Sturm, J. E. (2019). The KOF globalisation index - revisited. Review of International Organizations. https://doi.org/10.1007/s11558-019-09344-2
Hahn, C. H., & Narjoko, D. (2011). Globalization and Innovation in East Asia, In C. H. Hahn and D. Narjoko (Eds.), ERIA research project report 2010-04, pp.1–19. Jakarta: ERIA.
Hopper, T., Lassou, P. J. C., & Soobaroyen, T. (2017). Globalisation, accounting and developing countries. Critical Perspectives on Accounting, 43(125–148). https://doi.org/10.1016/j.cpa.2016.06.003
Howitt, P. (2000). Endogenous growth and cross-country income differences. American Economic Review, 90(4), 829–846.
Kluver, R., & Fu, W. (2004). The cultural globalization index. Foreign Policy.
Kuncoro, A. (2012). Globalization and Innovation in Indonesia: Evidence from microdata on medium and large manufacturing establishments. (Working Paper No. DP-2012-09).
Lesakova, L. (2018). The Critical View on Innovation Activity in SME’s Sector in Slovakia. In A. Dias, B. Salmelin, D. Pereira, & M. Dias (Eds.), Modeling innovation sustainability and technologies: Economic and policy perspectives. 137–147. Springer.
Liñán, F., Paul, J., & Fayolle, A. (2020). SMEs and entrepreneurship in the era of globalization: Advances and theoretical approaches. Small Business Economics, 55(3), 695–703.
Lockwood, B., & Redoano, M. (2005). The CSGR globalisation index: An introductory guide. Technical Report, 155(4), CSGR working paper.
Love, H. J., & Roper, S. (2015). SME innovation, exporting and growth: A review of existing evidence. International Small Business Journal: Researching Entrepreneurship, 33(1), 28–48.
Melitz, M. J. (2003) The impact of trade on intra-industry reallocations and aggregate industry productivity. Econometrica, 71(6), 1695–1725.
Mendy, J., Rahman, M., & Bal, P. M. (2020). Using the “best-fit” approach to investigate the effects of political economic and social barriers on SMEs’ internationalization in an emerging country context: Implications and future directions. Thunderbird international business review, 62(2), 199–211.
Michie, J. (1998). Introduction: The internationalisation of the innovation process. International Journal of the Economics of Business, 5(3), 261–277.
Nguyen, D., Nguyen, H., Kien, S., & Nguyen (2018). Ownership feature and firm performance via corporate innovation performance: Does it really matter for Vietnamese SMEs?. Journal of Asian Business and Economic Studies, 25(2), 239–250.
Nguyen, N. A., Nguyen, P. M., Nguyen, D. N., & Nguyen, D. C. (2011). Trade liberalization and innovation linkages micro-evidence from Vietnam SME surveys. In C. Hahn, & D. Narjoko (Eds.), ERIA Research Project Report 2010-04, pp.315–340. Jakarta: ERIA.
Norris, P. (2000). Governance in a globalizing world, global governance and cosmopolitan citizens. 155–177. Brookings Institution Press.
Norek, T., & Arenhardt D. L. (2015). Comparative analysis of innovative activity determinants in selected SME’s in Brazil and Poland. Results of empirical researches. Equilibrium-quarterly journal of economics and economic policy, 10(2), 157–181
Nye, J. S., & Keohane, R. O. (2000). Governance in a globalizing world, introduction, p.144. Brookings Institution Press.
OECD (2010). SMEs, entrepreneurship and innovation. Organisation for Economic Cooperation and Development.
OECD (2005). The measurement of scientific and technological activities. Proposed guidelines for collecting and interpreting innovation data. Organisation for Economic Co-operation and Development.
Ošenieks, J., & Babauska, S. (2014). The relevance of innovation management as prerequisite for durable existence of small and medium enterprises. Procedia-Social and Behavioral Sciences, 110(1), 82–92.
Perraton, J. (2011). The scope and implications of globalisation. In J. Perraton (2nd Eds.), The handbook of globalisation. Edward Elgar Publishing.
Peters, B., Riley, R., Siedschlag, I., Vahter, P., & McQuinn, J. (2018). Internationalisation, innovation and productivity in services: Evidence from Germany, Ireland and the United Kingdom. Review of World Economics. 585–615.
Potrafke, N. (2015). The evidence on globalisation. The World Economy, 38(3), 509–552.
Randolph, J. (2001). G-index: Globalisation Measured, World Markets Research Center (presently HIS Global Insight).
Rodil, Ó., Vence, X., & del Carmen Sánchez, M. (2015). The relationship between innovation and export behaviour: the case of Galician firms. Technological Forecasting and Social Change, 113, 248–265.
Romer, P. M. (1986). Increasing returns and long-run growth. Journal of Political Economy, 94, 1002–1037.
Romer, P. M. (1990). Endogenous technological change. Journal of Political Economy, 98(5), S71–S102.
Saleem, H., Li, Y., Ali, Z., Mehreen, A., & Mansoor, M. S. (2020). An empirical investigation on how big data analytics influence China SMEs performance: do product and process innovation matter? Asia Pacific Business Review, 26(5), 537–562.
Sander, F., & Janovsky, J. (2016). Globalization as a risk factor for creativity and innovativeness ekonomski vjesnik/econviews. Review of Contemporary Entrepreneurship, Business, and Economic Issues, 29(1).
Santoro, G., Ferraris, A., & Winteler, D. J. (2019a). Open innovation practices and related internal dynamics: case studies of Italian ICT SMEs. EuroMed Journal of Business, 14(1), 47–61.
Santoro, G., Mazzoleni, A., Quaglia, R., & Solima, L. (2019b). Does age matter? The impact of SMEs age on the relationship between knowledge sourcing strategy and internationalization. Journal of Business Research, 128(1), 779–787.
Scholte, J. A. (2008). Defining globalisation. The World Economy, 13(11), 1471–1502.
Schumpeter, J. A. (1943). Capitalism, Socialism, and Democracy. New York: Harper.
Scuotto, V., Santoro, G., Bresciani, S., & Del Giudice, M. (2017). Shifting intra?and inter?organizational innovation processes towards digital business: An empirical analysis of SMEs. Creativity and Innovation Management, 26(3), 247–255.
Sutton, J. (2007) Quality, Trade and the Moving Window: The Globalization Process, manuscript. The Economic Journal, 117(524), F469–F498. https://www.jstor.org/stable/4625568
Supriyono, B., & Trisnawati. (2015). Innovative public leadership (Case study on innovative food policy for SME’s in Sidoarjo Regency). Procedia - Social and Behavioral Sciences, 211( 2015 ), 1057–1063.
Vujakovic, P. (2010). How to measure globalisation? A new globalisation index (NGI). Atlantic Economic Journal, 38(2), 237–237.
Wolf, M. (2003). Is Globalisation in Danger? The World Economy, 26, 393–411.
Wagner, J. (2007). Exports and productivity: A survey of the evidence from firm-level data. World Economy, 30(1), 60–68.