The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding

Odei, Samuel Amponsah; Soukal, Ivan; Freibauer Hamplová, Eva; Trnková, Gabriela; Hruška, Jan Article The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding Cogent Economics & Finance Provided in Cooperation with: Taylor & Francis Group Suggested Citation: Odei, Samuel Amponsah; Soukal, Ivan; Freibauer Hamplová, Eva; Trnková, Gabriela; Hruška, Jan (2024) : The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding, Cogent Economics & Finance, ISSN 2332-2039, Taylor & Francis, Abingdon, Vol. 12, Iss. 1, pp. 1-19, https://doi.org/10.1080/23322039.2024.2385657 This Version is available at: https://hdl.handle.net/10419/321558 Standard-Nutzungsbedingungen: Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden. 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If the documents have been made available under an Open Content Licence (especially Creative Commons Licences), you may exercise further usage rights as specified in the indicated licence. https://creativecommons.org/licenses/by/4.0/ Cogent Economics & Finance ISSN: 2332-2039 (Online) Journal homepage: www.tandfonline.com/journals/oaef20 The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding Samuel Amponsah Odei, Ivan Soukal, Eva Freibauer Hamplová, Gabriela Trnková & Jan Hruška To cite this article: Samuel Amponsah Odei, Ivan Soukal, Eva Freibauer Hamplová, Gabriela Trnková & Jan Hruška (2024) The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding, Cogent Economics & Finance, 12:1, 2385657, DOI: 10.1080/23322039.2024.2385657 To link to this article: https://doi.org/10.1080/23322039.2024.2385657 © 2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group Published online: 02 Aug 2024. Submit your article to this journal Article views: 715 View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=oaef20 GENERAL & APPLIED ECONOMICS |RESEARCH ARTICLE The impacts of intellectual protection and R&D collaborations on firm-level innovations: the moderating role of internal funding Samuel Amponsah Odei, Ivan Soukal , Eva Freibauer Hamplov a, Gabriela Trnkov a and Jan Hru ska Department of Economics, University of Hradec Kr alov e, Hradec Kr alov e, Czech Republic ABSTRACT Investments in research and development (R&D) and innovations are proven to be vital catalysts for the successful transition into knowledge-based economies. Despite the growing importance attached to innovations and R&D, they have yet to receive enough scholarly attention in developing countries. This research aims to examine whether intellectual protection and innovation collaborations influence R&D and technological innovations. The empirical results involving 549 firms revealed that trademarks positively and marginally influence technological innovations but not R&D. The findings also revealed that domestic and international innovation collaborations with other firms and universities have a positive marginal effect on both technological innovations and R&D. The results also show that firms’internal funds significantly moderate the relationship between intellectual protection, technological innovations, and R&D. The main implication from our finding is that Ghanaian firms should consider investing in intellectual protection and forging collaborations with domestic and foreign firms and universities to increase their innovation performance and competitiveness. RESEARCH IMPACT This research uses insights from the systemic perspective of innovation to examine how firms’open innovation (domestic and international) and intellectual property rights influence technological innovation and R&D in an emerging economy. We further assess the moderating effect of internal funds in the relationships. Our empirical model based on firm-level data from 549 Ghanaian firms revealed that firms’collaborations with domestic collaborations with other firms increase technological innovation and R&D, while collaboration with foreign firms increases just technological innovation. The results further proved that firms collaborations with Ghanaian universities increase technological innovation but not R&D. Contrary, firms’collaborations with foreign universities increase both technological innovation and R&D. Trademarks and copyright protections demonstrated to increase technological innovation and R&D. Utility models were found to increase R&D but not technological innovation. The result of the mechanism effects shows that firms’internally generated funds positively moderate the relationships between utility models and both technological innovations and R&D. A similar result was found for the positive moderating role of internal funding in the relationships between copyrights and technological innovations and R&D. Contrary, the result proved that internal funding has a negative moderating effect in the relationship between trademarks and technological innovations, as well as R&D. The research findings have several significant implications for theory and practice from the standpoint of enterprises operating in emerging markets. Theoretically, although developed economies have garnered sufficient scholarly attention on innovation collaboration and intellectual property protection, their impact on innovation remains underexplored in emerging markets. Therefore, researching how open innovation involving both domestic and foreign partners as well as intellectual property protection and how they interact with firms’internal funding resonates with emerging market perspectives. Our findings have provided empirical evidence that open innovation and intellectual property protection influence both technological and R&D activities. These findings contribute to the burgeoning systemic perspective of innovation literature. Second, this study adds some theoretical insights to our comprehension of ARTICLE HISTORY Received 3 January 2024 Revised 19 March 2024 Accepted 8 July 2024 KEYWORDS Technological innovations; research and development; intellectual property rights; internal funding; collaborations; Ghana SUBJECTS Industry & Industrial Studies; Economics; Manufacturing Industries JEL CODES 03; 031; 032; 033; 034; 036 CONTACT Samuel Amponsah Odei [email protected] Department of Economics, University of Hradec Kr alov e, Rokitanskeho 62, Hradec Kr alov e, 50003, Czech Republic ß2024 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited. The terms on which this article has been published allow the posting of the Accepted Manuscript in a repository by the author(s) or with their consent. COGENT ECONOMICS & FINANCE 2024, VOL. 12, NO. 1, 2385657 https://doi.org/10.1080/23322039.2024.2385657 the effect mechanisms through which these relationships work to impact technological innovation and R&D. These mechanism-effect relationships have not been fully examined by existing studies. The main practical implications from the finding that the low extent of open innovation is that policymakers could extend public funding support to firms and higher educational institutions that intend to collaborate with both domestic and foreign partners. Finally, the allocation of internal funds to assist R&D operations covered by trademarks, utility models, and copyrights should be a top priority for firm management in Ghana. Introduction Technological innovations and related activities, such as research and development, have recently been hailed as the primary drivers of long-term growth and development (Zhou et al., 2020). The endogenous growth theory underscores the importance of R&D, innovation, and human capital in countries’economic growth progression (Aghion et al., 1998). Engaging in research and development activities has been proven to have positive externalities, which can improve firms’productivity and competitiveness. In an era of intense market competition fueled by the rapid pace of globalisation, firms are encouraged to innovate to improve their competitive advantage over their competitors (Azeem et al., 2021). Several innovation models for achieving innovations have been proposed. The linear model was the first of these models that focused on providing support to engage in internal R&D. According to Godin (2006), the linear model initially focuses on basic research, is followed by applied research and development, and concludes with new knowledge production and dissemination. However, this model was criticised for focusing on innovating in isolation (Edquist & Hommen, 1999). Then came the widely accepted open innovation model (West & Bogers, 2014), which fosters innovations through a collaborative approach involving several actors in the innovation process. Firms can collaborate with actors such as knowledge institutions, clients and customers, consultants, and other firms. Then open innovation promotes resource and expertise sharing among partners, with each partner playing a complementary role. Innovation, on the other hand, extends beyond these collaborations to include vital resources such as infrastructure, human capital, and intellectual property rights tools. Several strands of research on innovations have shown that developed economies have embraced innovations (see Lascialfari et al., 2019). Developing countries are shown to be catching up with technologies and innovations, but at a slow pace (Das & Drine, 2020). However, due to heterogeneities in these countries, it is still not known which country-specific conditions drive individual countries’innovations. As a result, there is a call for research into how specific country conditions shape innovation. Existing studies on firm-level innovations in Ghana and other developing countries exhibit numerous drawbacks that limit the scope to which firm-level innovations can be deeply analysed and understood. They have overly focused on small and medium-scale enterprises (see, for instance, Bamfo & Kraa, 2019), at the expense of large firms. We argue that for a detailed understanding of innovations, research should broadly not neglect any firm or sector in the analysis. We admit that there are numerous growing innovation studies, especially in Ghana, that have analysed innovations from the collaborating point of view (see, for instance, Odei et al., 2023). These studies have focused on innovation collaborations with just domestic partners, such as clients and customers, universities, and consultants, among others. While this study concluded that synergies involving domestic partners provide useful benefits to collaborating partners, we believe that ignoring innovation collaborations involving foreign partners limits our complete understanding of the benefits of firm collaborations. A thorough review of the extensive literature has also revealed that most of the research on innovations in Ghana and other developing countries has not considered key determinants such as intellectual property rights (IPR) protection. Although studies conducted elsewhere in the developed world have shown that they offer useful benefits to firms’innovations (see Deng et al., 2018; Odei & Hamplov a, 2022). We argue that the neglect of studies on the impact of intellectual protection from an emerging market perspective limits our understanding of how they impact the innovation process in these countries. Finally, several strands of research (see Nylund et al., 2020; Odei et al., 2023) have proven that firms’internal innovation funding has a direct influence on innovations because these funds enable them to undertake and sustain the innovation process. But fewer studies, especially in emerging economies 2 S.A. ODEI ET AL. like Ghana, have focused on the mechanisms by which firms’internal innovation funding moderates the relationships between intellectual property rights and innovation processes. Ignoring these critical determinants make our understanding of the innovation ecosystem in developing countries like Ghana incomplete, necessitating a different research approach or one that incorporates these neglected aspects of firms’ innovation processes to provide a broader understanding of the innovation landscape. This research fills this gap by examining whether firms’domestic and international innovation collaborations as well as intellectual property rights influence their technological innovation and R&D. We further assess the mechanisms through which firms’internal funds moderate the relationships between innovation collaborations, intellectual property rights, and firms’technological innovations and R&D. To fulfil the objectives outlined above, this research seeks to answer the following research questions: 1. Do domestic and international innovation linkages influence technological innovation and R&D in emerging economies? 2. Does intellectual property right protection enhance technological innovation and R&D in emerging economies? 3. How do firms’internal funds moderate the relationships between innovation collaboration and intellectual property rights protection in emerging markets? For the empirical estimation, we used a dataset from 549 firms in Ghana to examine whether intellectual property rights protection and innovation collaborations influence technological innovations and R&D. This study is novel as it analyses the influence of foreign innovation collaborations involving foreign firms and academic institutions and their abilities to influence Ghanaian firms’innovations. To the best of the researcher’s knowledge, no existing research has examined these relationships in Ghana and other African countries. Another theoretical implication of the paper is its contribution to the growing literature on intellectual property rights and their ability to influence firms’innovation. Existing studies on IPRs’influence on firms’innovations have disproportionately focused on using patents as a measure while ignoring other forms of intellectual property rights protection such as utility models, copyrights, and trademarks. Our results have established that other IPR tools, such as utility models, trademarks, and copyrights, could positively influence firms’innovation performances. These results contribute to increasing the current knowledge of other less known intellectual property protection tools such as trademarks, copyrights and utility models as suitable substitutes for patents, which have been proven to influence innovation outcomes. These findings add to and expand on the growing literature on firm innovations from a systemic perspective and from the perspective of developing countries. One key practical implication from our results is that Ghanaian firms’collaborations with foreign partners could allow them to access advanced foreign knowledge, expertise, and technologies, which could have positive spillover effects on the entire Ghanaian economy. The main limitation of this research relates to the use of cross-sectional data for 2013. While we admit that this data could be considered outdated, it’s the current and only innovation data released by the WBES for Ghana. The nature of the data also prevented panel data analysis due to data availability, especially for other countries. Despite these limitations, the results provide useful insights that could serve as the basis for understanding how intellectual protection and innovation collaborations influence firmlevel innovations in Ghana during the years of the survey. The rest of the article is organised in the following order: Section two reviews and deliberates on existing literature on the concepts of technological innovations, research, and development and the various factors boosting them. Section three is devoted to the methodology, measures, and source of data, while Section four is devoted to the detailed discussion of the empirical results in relation to the existing previous studies. Section five concludes the research with suggestions for further research, policy, and practical recommendations, as well as research limitations. Theoretical background and hypotheses formulation The main theoretical foundation of this research is the systemic perspective of innovation, which postulates that efficacious and sustainable innovation is contingent on firms’ability to coordinate and integrate a broad range of both internal and external antecedents of scientific and specialised knowledge (Midgley & Lindhult, COGENT ECONOMICS & FINANCE 3 2021). For the past two decades, the national innovation systems of several countries have followed a linear model. This linear innovation model theorises that firms entirely depend on internally generated knowledge; this is characterised by an absurdly weak dependence on the integration of external knowledge. Innovation policies based on the linear model are primarily focused on providing public subsidies to businesses and providing the necessary R&D infrastructure needed to accelerate innovation. However, there has been a paradigm shift in policy focus in recent times, with the belief that innovation is an open process with an organised social tendency that is primarily fuelled by external knowledge (West & Bogers, 2014). The source of this external knowledge is cooperating with actors such as universities, various government ministries, other firms, suppliers, clients, and consultants (West & Bogers, 2014). The new knowledge obtained from these external partners becomes important for firms’innovation outcomes (Odei et al., 2023). It helps revive stagnated processes, leading to innovations. However, for new knowledge to be beneficial to firms’innovations, they must improve their absorptive capacities through human capital development. Innovation refers to an organisation’s aptitude to apply significantly improved knowledge, ideas, or behaviours that are expected to result in improved products, internal processes, marketing, and organisational management practices (Mart ınez-Ros, 2019). Innovation has become one of the most influential strategic resources firms can rely on to improve their competitiveness, performance, and productivity. The continued improvements in firms’innovation competencies are beneficial to improving and placing them competitively amidst the fast-paced, changing market environment. Industrial innovation capabilities rest on the capability to persistently convert new knowledge and ideas into significantly improved products, processes, marketing, and organisational methods to realise more profits. Innovations can therefore be new to the firm itself or to the firm’s market (Odei & Hamplov a, 2022). This implies that a given invention could be new to the firm itself and its competitors, and this novelty could grant them a temporary competitive advantage until their rivals follow in their footsteps. According to the source measures, innovations can be classified as technological or non-technological (Geldes et al., 2017). Technological innovations broadly encompass improved products and processes, while non-technological innovations entail marketing and organisational innovations (Geldes et al., 2017; Odei et al., 2023). Technological innovation is a broad set of activities undertaken by firms or in close collaboration with other actors that significantly lead to technological advancements that provide economic benefits to firms. Technological innovations essentially involve the expansion and utilisation of advanced technologies (Geldes et al., 2017). Research and development activities are known to be a significant source of new knowledge and a proven catalyst for the innovation process. Though R&D is an important source of new knowledge, certain schools of thought believe that it is not necessarily a requirement for innovations and that this could be acquired elsewhere through collaboration (Cappelen et al., 2012). Research on the nexus between firms’innovation and intellectual property rights (IPRs) has increased in recent times (see, for example, Neves et al., 2021). Intellectual assets consist of the various forms of IPR protections that are indispensable for firms to transfigure their inventions and creativity into economic gains. IPRs enable inventors to protect their new knowledge and discoveries, as they grant them the exclusive right to benefit from these inventions. In the absence of these intellectual property protections, the free market will not afford inventors adequate inducements to undertake risky and costly investments to generate new knowledge and technologies. Vigorous IPR protection is necessary because knowledge has the special attribute of being a public good that is non-excludable. These distinct attributes make it problematic and difficult to prevent other people from using new knowledge without the consent of the inventor. IPR protection therefore serves as an incentive to finance innovation and boost innovation collaborations. The lack of these intellectual property protections is a disincentive to firms’ innovations as they decrease the expected benefits; this could make inventors unwilling to undertake innovative activities (Acemoglu & Akcigit, 2012). Several IPR tools, such as trademarks, utility models, patents, copyrights, service marks, and industrial design rights, are used for protection. Patents are the most widely used and researched among all these tools. Intellectual property is considered an essential factor in determining whether individuals will be successful in launching new high-tech firms or expanding existing ones (Laplume et al., 2014). Research by Odei and Hamplov a(2022) in small businesses found that European utility models influence both major and minor forms of innovation but not general innovations. Jafari-Sadeghi et al. (2021) found that trademarks positively influence technology expansion. Relatedly, Carree et al. (2015) also concluded that both trademarks and patents positively influence 4 S.A. ODEI ET AL. innovative activities. Based on the findings of these studies, we summarise the understanding that IPR such as patents, copyrights, utility models and trademarks could be vital to the success of innovations because they provide legal protections and exclusive rights to innovative firms. These rights incentivize investments in R&D by ensuring that innovative firms can recoup their profits and investments from their innovation activities. We therefore hypothesise that Hypothesis 1a: Trademarks are positively related to R&D and technological innovations. Hypothesis 1b: Utility models has a positive influence on R&D and technological innovations. Hypothesis 1c: Copyrights are expected to positively influence R&D and technological innovations. Firms’innovation collaboration has also been proven to be an effective means through which firms can acquire new knowledge, technologies, and expertise if they do not have the competencies to generate them internally (Odei et al., 2020; West & Bogers, 2014). The open innovation model, which postulates that firms need not innovate in isolation but rather collaborate with other partners through resource pooling, suggests firms forge networks with external collaborators to supplement internal activities proposed to stimulate and sustain innovations. Firms require cooperative learning capabilities to be able to generate, broadcast, understand, and merge new external knowledge from network innovation development (West & Bogers, 2014). These collaborations also allow firms to collectively share the expected benefits and costs involved in the innovation process. Firms have lots of partners to collaborate with, namely higher education institutions, consultants, other firms, and customers, among others. In all these partnerships, the collaborations of academic institutions have been heralded as an effective means of acquiring new external knowledge due to their research focus (Fitjar & Gjelsvik, 2018). R&D activities performed by universities and other research institutes advance innovations in many ways. The common view assumes that academic research activities result in codified knowledge that manifests itself through journal publications. This knowledge is epitomised in the technological innovations and discoveries that firms can utilise to innovate. Firms’R&D collaboration with other firms can enable this codified knowledge to be transferred. A study by Odei et al. (2023) among Ghanaian firms concluded that firms’collaborations with other firms positively influenced process and marketing innovations, while collaborations with suppliers were positively correlated with organisational innovations. However, collaborations with Ghanaian universities negatively influenced all innovation outcomes. A related study by Azamela et al. (2022) in Ghana also found that firms’ engagement with Ghanaian cooperative partners like universities enhances their innovation capacities. Based on the conclusions of these studies, we anticipate that firms’domestic partnerships with other firms and universities could enhance their ability to access new knowledge, resources, and expertise, which have been proven to significantly influence internal innovation efforts. Without these innovation collaborations, firms may not have access to these external knowledge and resources, so they may struggle to innovate. Based on the findings of these referenced studies, we hypothesise that Hypothesis 2a: Firms’collaboration with other domestic firms is positively correlated with technological innovations and R&D. Hypothesis 2b: Collaborations with domestic universities positively influence technological innovations and R&D. Collaboration with foreign partners such as clients and universities, among others, provides access to advanced technologies, expertise, and knowledge that may not be readily available domestically (Audretsch & Belitski, 2024; Odei & Stejskal, 2020; Un & Rodr ıguez, 2018). This exposure to new knowledge and techniques can stimulate innovation within domestic firms, leading to the development of novel products or processes. Partnering with foreign firms, for instance, can facilitate access to new markets, distribution channels, and customer segments (Odei & Stejskal, 2020). By leveraging the networks and market insights of their foreign partners, domestic firms can identify and capitalise on emerging opportunities, driving innovation in response to changing market demands. International innovation collaborations have also been proposed to overcome weak domestic innovation potential (Moaniba et al., 2019). Due to the weak innovations in Ghana, firms could profit from internationalisation by forging collaborations with foreign partners such as universities, consultants, and other firms. These international linkages could be COGENT ECONOMICS & FINANCE 5 avenues for firms to access advanced knowledge, technologies, and expertise, which are usually lacking in developing countries (Rodr ıguez et al., 2018). The continuous public support for innovations in advanced countries means that they abound in such advanced knowledge generated from R&D. This can have positive spillover effects in Ghana with minimal public innovation support. Odei and Stejskal (2020) research discovered that international collaborations with universities and businesses have additional effects on technological innovations and external R&D. We therefore summarise the understanding based on the above-mentioned existing studies that foreign knowledge, technologies, and expertise from other firms and universities could be beneficial to firms in countries with weak innovation prospects. These foreign collaborations could allow firms to access new knowledge that cannot be produced domestically due to the weak innovation ecosystem. This foreign knowledge can influence the technological knowledge and R&D potential of firms and have positive externalities on the entire economy. As a result, we hypothesise. Hypothesis 3a: Firms’collaboration with foreign universities positively enhances technological innovations and R&D. Hypothesis 3b: Firms’collaboration with foreign firms is positively related to improved technological innovations and R&D. Funding is a fundamental factor affecting firms’research and development as well as innovation activities (Odei et al., 2023). The lack of funding may constrain firms’abilities to engage in R&D, which is known to improve innovation development. Innovation funding is a major concern for firm managers, industry practitioners, and policymakers because funding limitations due to imperfections in the capital markets lead to drastic reductions in innovation investments (Hottenrott & Peters, 2012). Sustainable innovation investments could impinge on financial constraints due to information asymmetries and high levels of uncertainty surrounding innovation activities. Innovation activities are cost-intensive, so the availability of funding could ensure that firms do not abandon on-going projects. Research on innovation funding by Shankar (2020) concluded that innovation funding impediments serve as a key factor that negatively influences African firms’innovation activities. Odei et al. (2023) study on Ghana found that internal funds positively influenced technological innovations in both the service and manufacturing sectors. Similar studies by Asiedu et al. (2021) found that internal funding enhances new product development among subSaharan African firms. However, Udimal et al. (2019) studies on Ghanaian small and medium-scale enterprises concluded that internal funding does not significantly influence new product innovations. Despite the importance of funding in the innovation process, most firms in African countries face hurdles with financial access. They face considerable challenges, such as high interest rates and collateral demands (Appiah et al., 2019). These challenges mean that firms are normally cut off from the financial markets and other external funding sources (private and government). Firms may have to rely on internal funds generated from their accumulated profits. These internal funds will constitute most of the funding for firms, and this can influence their innovation activities, such as R&D, acquiring IPR tools, human capital development, and collaboration, among others. Firms with greater internal funding are better positioned to invest in collaborative innovation projects, both domestically and internationally (Fan et al., 2019). Adequate internal financial resources enable firms to cover the costs associated with collaboration, such as R&D expenses, personnel costs, and technology acquisition. Furthermore, internal funding levels impact the intensity as well as scope of firms’R&D activities, which in turn affects their ability to innovate (CuervoCazurra et al., 2018). Firms with higher levels of internal funding could afford to allocate more resources to R&D efforts, including the development of new technologies, products, or processes. This increased R&D intensity can amplify the positive effects of intellectual property rights on innovation by enabling firms to pursue and sustain their innovation activities. We therefore posit that internal funding is more likely to moderate firms’collaboration and ability to secure IPR tools, which could influence overall innovation performances, which is in line with the systemic perspective of innovation theory that views access to funds as an internal asset (Midgley & Lindhult, 2021). We therefore hypothesise that Hypothesis 4: Internal funding is expected to positively moderate the relationships between firms’collaborations and abilities to acquire intellectual property rights. 6 S.A. ODEI ET AL. Methodology Data for the empirical specification is based on a sample of 549 firms obtained from the World Bank Enterprise Survey (WBES) conducted between 2010 and 2013. As of the time of completing this research, the 2013 dataset is the latest released by the WBES for Ghana. The WBES is jointly conducted by three major financial institutions, specifically the European Bank for Reconstruction and Development (EBRD), the World Bank Group (WBG), and the European Investment Bank (EIB). The WBES is currently carried out in about 154 countries, encompassing more than 180,000 firms. The WBES solicits data using the stratified random sampling technique based on industries, firm size, and geographical locations (regions). The WBES has a broad array of data covering innovations, innovation collaborations, sources of innovation funding, intellectual property rights protection, firm characteristics, and human capital, among others. This comprehensive nature of the data makes the WBES one of the best datasets for empirical analyses of firm-level innovations. The popularity and usage of the WBES dataset have soared among innovation scholars, and it has been extensively used for several firm-level innovation analyses (see Odei et al., 2023). The final sample involved large and small firms from both the manufacturing and service sectors of Ghana, with a sectoral breakdown as follows: service sector (265, 48.27%) and manufacturing sector (284, 51.73%). The data was first cleaned before the empirical analysis; we omitted all ‘don’t know’spontaneous responses and replaced missing values with zeros. All the key variables considered in this paper are binary and span around technological innovations, innovation collaborations, intellectual property rights protections, internal funding, and R&D. The binary attributes of these variables make it essential to utilise latent variables to empirically model their relationships. We acknowledge that there are evident unobserved variables or structural characteristics that could possibly influence both R&D and technological innovations, since R&D could be considered a catalyst for innovations. Our empirical strategy therefore first estimates bivariate probits without considering R&D as an endogenous dummy variable. This approach enabled us to determine whether a joint estimation is appropriate, but it did not allow us to calculate the influence of R&D on technological innovations. The presence of exogeneity is then tested by using maximum-likelihood simultaneous estimations of the two probit equations; this analytical approach is known as the recursive bivariate probit (Monfardini & Radice, 2008). Similarly, Filippini et al. (2018) describe this estimation strategy as a seemingly unrelated probit model with an endogenous binary variable. The seemingly unrelated bivariate probit model is generally used to calculate two simultaneous equations where one of the outcome variables is used as a covariate to predict the other. In sum, the bivariate probit model concurrently models two binary dependent variables whose unobserved characteristics are assumed to be correlated. This model simplifies the index function of an unobserved latent variable to another that may be considered orthogonal (Holm & Jæger, 2011). We presuppose that technological innovation is a latent variable designated by Z1i, while Z2i represents the other latent variable capturing R&D. As a result, we specify the two concurrent equations, with the unobserved latent as Z 1¼X1b1þe1(1) Z 2¼X2b2þe2(2) where e1and e2are mutually normal with 0 means, same variances, and correlation q e1 e2jX  N0 0 1 q q 1  ! (3) We provide the bivariate probit model with observed outcomes as Z1¼1 0, if Z 1>0 otherwise (4) Z2¼1 0, if Z 2>0 otherwise (5) Finally, we specify the bivariate probit model as Pz 1¼i,z2¼j ðÞ ¼ɸ2X0 1b1,X0 2b2,q  COGENT ECONOMICS & FINANCE 7 innovations have long been carried out in developed countries, but the momentum of such studies is gradually increasing in developing countries like Ghana. Despite the growing research on innovations in developing countries, the various factors influencing country-specific innovations remain unclear. This study is therefore intended to fill in the research gap by considering the factors capable of influencing technological innovations and R&D. We examined the possible heterogeneity in firms’innovations and the various related activities undertaken by firms to successfully innovate by using the seemingly unrelated probit model. The findings revealed that technological innovations and R&D activities are not jointly determined, even though they both have positive externalities towards each other. Using stratified data from 549 Ghanaian firms from both the service and manufacturing sectors and employing a blend of three estimation techniques, this research finds that just about 3% of sampled firms reported having utility models, trademarks, and copyrights. For these firms, these intellectual property rights protection tools positively influence technological innovations and R&D. The descriptive statistics results also showed that the extent of innovation collaborations among Ghanaian firms is very low or almost non-existent. However, for the few firms that collaborated, the results revealed that these collaborations were more likely to have a marginal or additional impact on their technological innovations and R&D. Internal funding was seen as the dominant source of funding for these firms, representing about 62% of all funding. These internal funds proved to significantly influence technological innovations and R&D outcomes and positively moderate the relationships between utility models, copyrights, and various outcome measures. The findings of this study make a theoretical contribution because we built on existing literature from the perspective of an emerging economy. The first theoretical contribution of the research is the incorporation of international innovation linkages involving both foreign firms and academic institutions. These synergies have not yet been explored in the case of many developing countries that are characterised as having weak innovation potential. Our results have shown that Ghanaian firms’collaborations with foreign partners can enable them to access advanced foreign knowledge, expertise, and technologies, which could have positive spillover effects on the Ghanaian economy. Secondly, the importance of domestic collaboration was proven by our results. Both domestic firms and academic institutions were significant sources of R&D and technological innovations. These findings are consistent with the systemic view of innovation from the perspective of developing countries (Midgley & Lindhult, 2021). The findings on the role of intellectual property rights protection in influencing both technological innovations and R&D contribute to a systemic view of innovation from the standpoint of developing countries. Trademarks, utility models, and copyrights have been shown to have both marginal and additionality effects on technological innovation and R&D. These findings resonate with the conclusion of other studies (Marire, 2022; Odei & Hamplov a, 2022; Udimal et al., 2019). These vital strategic resources could be acquired through firms’collaborations with issuing companies, which is in line with the systemic perspective of innovation. The finding that internal funding improves the relationship between utility models and technological innovation contributes to the systemic view of innovation by underscoring the importance of internal resources, such as funding, in shaping the effectiveness of intellectual property rights (IPR) mechanisms. It highlights the interplay between internal funding and IPR in facilitating innovation and R&D, demonstrating that the two factors are not independent but rather interact and reinforce each other within the innovation system. Firms should also consider diversifying their innovation strategies beyond reliance solely on trademarks as a means of protecting intellectual property. Firms should explore alternative strategies, such as patents, copyrights, or utility models, which may be more closely linked to R&D and technological innovation, which could benefit from internal funding support. These results have major policy and practical implications. One key implication that arises from the results of the open innovation is that Ghanaian firms are yet to realise the full benefits of collaborating with, for instance, knowledge repositories (public research organisations and universities). According to Vega-Jurado et al. (2021), the low levels of firms’collaborations with higher education institutions are prevalent in countries with low absorptive capacities. This necessitates policymakers and firm managers working out collective strategies to make these synergies more beneficial, allowing firms to boost their innovative abilities to be able to access valuable knowledge from these knowledge institutions. The results have also shown the importance of both domestic and international synergies and their abilities 14 S.A. ODEI ET AL. to influence technological innovations and R&D in Ghana. It is essential for firm managers and scholars to harness the full potential of synergies with both domestic and foreign innovation partners, especially higher educational institutions. Ghanaian firm managers need to take full advantage of the internationalisation process to exploit innovations from foreign countries with strong innovation potentials to complement the current weak innovation performance. These results first call for governmental support or funding. Public funding support could be extended to firms and academic institutions that intend to collaborate with both domestic and foreign partners. The focus of public support should be targeted at increasing research quality among Ghanaian researchers and higher educational institutions. The current research allowance regime, which does not consider research quality, needs to be reconsidered to have a clear quality focus, which, when done, could increase research quality rather than quantity. Second, to boost innovations in Ghana, the government needs to increase the existing gross domestic expenditure devoted to research and development (GERD), which is currently 0.38 percent of GDP. The increment could help improve research infrastructure and support, leading to an improvement in research quality. Improved research quality could be vital to enhancing collaborations for innovations. Lastly, the findings have shown that intellectual property rights protection influences both technological innovation outcomes and R&D. Another managerial implication of this result is that firm managers in Ghana need to focus on acquiring intellectual property rights protections for their innovations and inventions. The results have proven that internal funding moderates the relationship between firms’abilities to acquire intellectual property rights and tools such as utility models, copyrights, and innovations. Firm managers in Ghana should prioritise allocating internal funding to support R&D activities that are protected by utility models and copyrights. By investing in innovative activities that have the potential to generate a utility model and copyright protection, firms can enhance their competitiveness. Firms should consider the role of internal funding in shaping resource allocation decisions related to innovation and IPR management. Policymakers in Ghana should consider providing incentives and support for firms to invest in R&D and technological innovation, particularly in industries where trademarks may be less closely connected with innovation. This could include providing funding for R&D initiatives, tax incentives for innovation-related expenditures, or grants for collaborative research partnerships. This research acknowledges a few limitations, which could potentially be improved by future research. First, the study is based on cross-sectional data for the year 2013, the current and only innovation data released by the WBES for Ghana. While we admit that the results might not reflect the status quo of innovations in Ghana, they provide useful insights that could help understand the determinants of innovations during the period. Furthermore, there is no data available on innovation collaboration and intellectual protection for other African countries. This prevented us from having panel data analysis involving other countries. When new data becomes available, further research could be conducted to compare our results and determine the trend of innovations in Ghana and other African countries. Furthermore, this study only considered technological innovations and R&D but not other measures such as non-technological innovations, patents for both product and process innovations, major and minor forms of innovation, etc. We recommend future studies consider these omitted outcome variables when data becomes available. Lastly, this research was limited to Ghana. Future research could possibly be carried out in other developing countries, especially Africa, to assess the generalisability of our findings. Finally, while we found statistically significant moderating effects of internal funding and how it impacts intellectual property protection, it would be interesting to assess the other mechanisms through which firms’collaborations and intellectual protection could effectively impact R&D and technological innovation. Future studies could, for example, examine the contingent effects of other factors that can impact the effectiveness of collaborations and IPR for innovation, such as the legal and regulatory environment in which firms operate (Huang et al., 2017; Telg et al., 2023) and market dynamics and competitive pressures (Nuruzzaman et al., 2019; Ogink et al., 2023). Author’contributions SOA: conception and design, analysis and interpretation of the data and the drafting of the paper; IS; Data curation, writing original draft, reviewing, and editing; EFH: writing original draft, reviewing, and COGENT ECONOMICS & FINANCE 15 editing; GT: supervision, revision, and the final approval of this version. JH: data curation, writing original draft, reviewing and editing. All authors agree to be accountable for all aspects of the work. Acknowledgement The authors are grateful to the students Michal Zilvar and Martin Mat ej ı  cek for providing us with feedback on the overall concept and editing of the article. Disclosure statement The author declares no competing conflict of interests. Funding The article was supported by the specific research project “Economic Impacts under the Industry 4.0 / Society 5.0 Concept”, 2024, University of Hradec Kr alov e, Faculty of Informatics and Management, Czech Republic. About the authors Samuel Amponsah Odei, holds a doctorate degree in regional and public economics from the University of Pardubice, in the Czech Republic. He currently works as a postdoctoral researcher at the Department of Economics at the University of Hradec Kr alov e in the Czech Republic. His current research interests focus on analyses of innovations from the micro and macro perspectives, regional growth and development. Ivan Soukal (1983), graduated from the Faculty of Informatics and Management, University of Hradec Kralove (2008), where he also received his Ph.D. (2012). He is an Associate Professor at the Department of Economics, Faculty of Informatics and Management, University of Hradec Kralove, Czech Republic. He is a general secretary of the Hradec Economic Days conference. His main research areas are consumer behavior and banking. Eva Freibauer Hamplova, is an Assistant Professor (Economics) in the Faculty of Informatics and Management at the University of Hradec Kralove, Czech Republic. She received her PhD from Masarykova University, Brno and her Ing from the University of Economics, Prague. Her research interests include entrepreneurship in the Czech Republic, financial management, SMEs, board gender diversity and post—audit of capital projects. Gabriela Trnkov a Ing, is an Assistant Professor (Economics) at the Faculty of Informatics and Management at the University of Hradec Kr alov e, Czech Republic. She received her PhD, master and bachelor degrees from the Czech University of Life Science, Prague. Her research interests include economics of agricultural and food processing business with focus on efficiency and productivity analysis, financial analysis, entrepreneurship and SMEs in the Czech Republic, agricultural policy and rural development. Jan Hru ska, is a researcher at the University of Hradec Kr alov e. He has a PhD in information and knowledge management. His research interests include marketing, management, tourism, neural networks, machine learning, and predictions. ORCID Ivan Soukal http://orcid.org/0000-0003-3468-0270 Data availability statement Data could be provided on request. References Abdulai, A. F., Murphy, L., & Thomas, B. (2022). The influence of informal mechanisms of university knowledge transfer on firm level innovation performance: An empirical analysis in Ghana. Development Studies Research,9(1), 262– 276. https://doi.org/10.1080/21665095.2022.2132013 Acemoglu, D., & Akcigit, U. (2012). Intellectual property rights policy, competition and innovation. Journal of the European Economic Association,10(1), 1–42. https://doi.org/10.1111/j.1542-4774.2011.01053.x 16 S.A. ODEI ET AL. Adomako, S., Amankwah-Amoah, J., Debrah, Y. A., Khan, Z., Chu, I., & Robinson C. (2021). 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