Secondary innovation and firm performance: A case study of JSE listed companies

Author(s):
Jacques Totowa and Euphemia Godspower-Akpomiemie

Article history:
Received: 17 January, 2023
Accepted: 02 November, 2023

Abstract:

Companies are always on the lookout for means to improve their performance for the benefit of their shareholders and other interested parties. Literature has shown that innovation through research and development (R&D) can be a catalyst for the performance of a company. Unfortunately, not all companies are able to invest in R&D, especially in emerging markets such as South Africa. Instead, some acquire patents and licenses (secondary innovation) to achieve the same goals. This study uses generalized method of moment (GMM) approach on a data set of companies listed on the Johannesburg stock exchange (JSE) between 2007 and 2021, to ascertain the impact that secondary innovation has on the performance of JSE listed companies. Our results suggest that the acquisition of secondary innovation has a positive impact on JSE listed firm. However, we found evidence that the South African government policies in relation to innovation hampers the performance of JSE listed companies

Keywords:
Secondary Innovation, firms’ performance, South Africa


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