Foreign Technologies and Indigenous Innovation Performance: Evidence from Selected African Countries

Abstract This study analyzes the impact of imports and foreign direct investment inflows (FDI) on indigenous innovation in some selected African countries. Panel data of five African countries for the period between 1994 and 2018 is analyzed using trademark applications by residents as proxy for indigenous innovation. A vector error correction model is employed to analyze the short-run causality between variables, and fully modified ordinary least squares to analyze the long-run dynamics among variables. The results show that, on the whole, imported inputs have significant and positive effect on indigenous innovation output, while FDI has negative effects. Policy formulation in the region should encourage imports aimed at creating novel products.