13

This paper fills a gap in the literature by using a unique dataset from Côte d’Ivoire to compare formal and informal firms as to their innovation practices, and to investigate the degree to which the manager’s tenure and employees’ involvement in decision-making correlate with innovation in firms in a developing country. We find an inverted-U relationship between the manager’s tenure and both technological and non-technological innovations. Employees’ involvement in decision-making is positively correlated with both technological and non-technological innovations. However, the correlation is stronger for technological innovation. Formality status is found to be positively correlated with both technological and non-technological innovations. However, this correlation is no more significant when firm size is controlled for, which suggests that firm size is critical in explaining the differentials in innovativeness between formal and informal firms. We conclude with recommendations. JEL Codes: O12, O17, O31, O55, M50.