Does the cost of energy matter for innovation? The effects of energy prices on SME innovation in Sub-Saharan Africa

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dc.cclicenceCC-BY-NCen
dc.contributor.authorHussain, Javed
dc.contributor.authorKarimu, Amin
dc.contributor.authorSalia, Samuel
dc.contributor.authorOwen, Robyn
dc.date.acceptance2022-01-12
dc.date.accessioned2022-03-07T16:16:33Z
dc.date.available2022-03-07T16:16:33Z
dc.date.issued2022-03-01
dc.descriptionThe file attached to this record is the author's final peer reviewed version. The Publisher's final version can be found by following the DOI link.en
dc.description.abstractPurpose: Energy and environment has gained traction within the field of entrepreneurship literature, but a comprehensive empirical study that examines the relationship between the cost of energy and small- and medium-sized enterprise (SME) innovation is an omission. Therefore, this novel study aims to examine the relationship between the cost of energy and SMEs innovation in Sub-Saharan Africa (SSA) by first examining the differential impact of the various generation sources on the price of electric energy. This research has enabled us to investigate and understand the transmission mechanism of increasing/decreasing electricity price on innovation decisions and activities of SMEs in SSA. Design/methodology/approach: Using quantitative approach, with the data from the World Bank Enterprise and Innovation Follow-up Surveys, the study utilises a Tobit model to test whether the generation mix (renewable and non-renewable generation sources) increases or decreases electricity prices and examine the impact of the cost of electric energy on SMEs innovation in SSA. Findings: The findings of this study shows that the cost of electricity affects negatively on SMEs innovation decision and activities of SMEs in SSA. The impact of renewables on the price of electricity has a larger magnitude relative to that of non-renewables. This finding has implications for policy makers promoting renewable energy without a policy design to tackle the unintended price effect of promoting renewable energy. Originality/value: This is the first study to introduce cost of energy into an innovation model and to empirically examine the role of cost of energy for innovation activities of SMEs in SSA. Further, it examines the sources of generation on electricity price in SSA. The study contributes towards the empirical literature, and the findings also have implication for policy makers regarding the unintended consequences of promoting the transition to low-carbon electricity generation sources on SMEs via the cost of doing business implication.en
dc.funderNo external funderen
dc.identifier.citationHussain, J., Karimu, A., Salia, S. and Owen, R. (2022) Does the cost of energy matter for innovation? The effects of energy prices on SME innovation in Sub-Saharan Africa. International Journal of Entrepreneurial Behavior & Research, 28 (2), pp. 548-566en
dc.identifier.doihttps://doi.org/10.1108/IJEBR-10-2021-0855
dc.identifier.urihttps://hdl.handle.net/2086/21730
dc.peerreviewedYesen
dc.publisherEmeralden
dc.researchinstituteFinance and Banking Research Group (FiBRe)en
dc.subjectSMEsen
dc.subjectRenewable energyen
dc.subjectInnovationen
dc.subjectInfrastructureen
dc.subjectSub-Saharan Africaen
dc.titleDoes the cost of energy matter for innovation? The effects of energy prices on SME innovation in Sub-Saharan Africaen
dc.typeArticleen

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