Although informal firms are rare in developed economies, they are prevalent in emerging economies and create significant competitive pressure for formal firms. Recent literature has focused on the effects of informal competition on product innovation, but the results have been inconsistent. This discordance motivated this study. Drawing on insights from competitive rivalry, this study investigates how informal competition affects formal firms’ product innovativeness (i.e., whether to develop new-to-market products or not). Using a sample of firms operating in Eastern Europe and Central Asia from the World Bank Enterprise Survey, we find that if formal firms encounter intense competitive pressure from informal firms, they are less inclined to develop new-to-market products. Furthermore, credit constraints strengthen the adverse effect of competitive pressure from informal firms on the development of new-to-market product innovation, but state legitimacy weakens this effect. This investigation provides insight into the barriers to innovation in emerging economies and adds to the existing literature by highlighting the need to consider the varied effects of informal competition on different types of product innovation.

中文翻译：

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来自非正式企业的竞争和新市场产品创新：竞争框架

尽管非正规企业在发达经济体中很少见，但它们在新兴经济体中却很普遍，并给正规企业带来了巨大的竞争压力。最近的文献关注非正式竞争对产品创新的影响，但结果并不一致。这种不一致激发了这项研究。借鉴竞争的见解，本研究调查了非正式竞争如何影响正规公司的产品创新性（即是否开发新的市场产品）。通过使用世界银行企业调查中在东欧和中亚运营的企业样本，我们发现，如果正规企业遇到来自非正规企业的强烈竞争压力，它们就不太愿意开发新市场产品。此外，信贷约束强化了非正规企业的竞争压力对新市场产品创新开发的不利影响，但国家合法性削弱了这种影响。这项调查深入了解了新兴经济体的创新障碍，并强调需要考虑非正式竞争对不同类型产品创新的不同影响，从而丰富了现有文献。