Effects of informal competition on innovation performance: the case of pacific alliance

Abstract

This study evaluates the impact of informal competition on the innovation performance of formal firms in emerging economies. A theoretical model under the strategy tripod framework is proposed. It analyzes the effects of Institutional factors as the quality of governance and market labor rigidities on innovation performance, and the mediating effect of informal competition. It is used the Causal Mediation Analysis with data from 3,268 companies from the World Bank Enterprise Survey from countries of the Pacific Alliance (Chile, Colombia, Mexico, and Peru). The results state that informal competition has a negative effect on the innovation performance of formal companies. Based on these findings, It is suggested some promising avenues for future research and managerial implications.