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The effect of innovation policy on SMEs’ employment and wages in Argentina

Author

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  • Victoria Castillo
  • Alessandro Maffioli
  • Sofía Rojo
  • Rodolfo Stucchi

Abstract

This article evaluates the effect of the Argentinean Support Program for Organizational Change on employment and wages. The program aimed at increasing small and medium-sized enterprises’ competitiveness by co-financing technical assistance to support process and product innovation activities. Although employment is not usually the main objective of these types of programs, they are always implemented assuming that they create—or at least do not destroy—employment opportunities. We use a unique data set with information for the population of firms in Argentina from 1996 to 2008 to test this important assumption. Using a combination of fixed effects and matching, we find that both process and product innovation support increased employment and wages, with a higher impact on employment. In addition, we find that product innovation support had a larger effect on wages than process innovation support. Copyright Springer Science+Business Media New York 2014

Suggested Citation

  • Victoria Castillo & Alessandro Maffioli & Sofía Rojo & Rodolfo Stucchi, 2014. "The effect of innovation policy on SMEs’ employment and wages in Argentina," Small Business Economics, Springer, vol. 42(2), pages 387-406, February.
    • Handle: RePEc:kap:sbusec:v:42:y:2014:i:2:p:387-406
    DOI: 10.1007/s11187-013-9485-9
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    Cited by:

    1. Casaburi, Gabriel & Crespi, Gustavo & De León, Ignacio L. & Figal Garone, Lucas & Grazzi, Matteo & Guaipatín, Carlos & Katz, Jorge & Llisterri, Juan J. & Maffioli, Alessandro & Navarro, Juan Carlos & , 2016. "La política de innovación en América Latina y el Caribe: Nuevos caminos," IDB Publications (Books), Inter-American Development Bank, number 7705.
    2. Lucas Figal Garone & Alessandro Maffioli & Joao Negri & Cesar Rodriguez & Gonzalo Vázquez-Baré, 2015. "Cluster development policy, SME’s performance, and spillovers: evidence from Brazil," Small Business Economics, Springer, vol. 44(4), pages 925-948, April.
    3. Ramiro de Elejalde & David Giuliodori & Rodolfo Stucchi, 2015. "Employment and Innovation: Firm-Level Evidence from Argentina," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 51(1), pages 27-47, January.
    4. Xavier Cirera & Leonard Sabetti, 2019. "The effects of innovation on employment in developing countries: evidence from enterprise surveys," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 28(1), pages 161-176.
    5. Butler, Ines & Giuliodori, David & Guiñazu, Sebastian & Martinez Correa, Julian & Rodríguez, Alejandro, 2017. "Programas de Financiamiento Productivo a pymes, acceso al crédito y desempeño de las firmas: Evidencia de Argentina [Productive programs for SMEs, access to credit and performance of firms: evidenc," MPRA Paper 83524, University Library of Munich, Germany.
    6. Boneu, Franco & Giuliodori, David & Maffioli, Alessandro & Rodríguez, Alejandro & Stucchi, Rodolfo, 2014. "The spillover effects of the ICT cluster support in Córdoba," MPRA Paper 60307, University Library of Munich, Germany.
    7. Victoria Castillo & Lucas Figal Garone & Alessandro Maffioli & Moira Ohaco, 2016. "Asistencias técnicas y competitividad de las MiPyMEs: Evidencia para Argentina," IDB Publications (Working Papers) 96960, Inter-American Development Bank.
    8. Giuliani, Elisa & Maffioli, Alessandro & Pacheco, Manuel & Pietrobelli, Carlo & Stucchi, Rodolfo, 2014. "Evaluating the Impact of Cluster Development Programs," Papers in Innovation Studies 2014/10, Lund University, CIRCLE - Centre for Innovation Research.
    9. Nuno Campos Pereira & Nuno Araújo & Leonardo Costa, 2016. "A counting multidimensional innovation index for SMEs," Working Papers de Economia (Economics Working Papers) 01, Católica Porto Business School, Universidade Católica Portuguesa.
    10. Gabriel Casaburi & Gustavo Crespi & Ignacio L. De León & José Fernández & Lucas Figal Garone & Matteo Grazzi & Carlos Guaipatín & Jorge Katz & Juan J. Llisterri & Alessandro Maffioli & Juan Carlos Nav, 2016. "La política de innovación en América Latina y el Caribe: Nuevos caminos," IDB Publications (Books), Inter-American Development Bank, number 94816 edited by Juan Carlos Navarro & Jocelyn Olivari, February.
    11. Victoria Castillo & David Giuliodori & Alessandro Maffioli & Alejandro Rodríguez & Sofía Rojo & Rodolfo Stucchi, 2014. "El impacto del apoyo al cluster de TIC de la ciudad argentina de Córdoba," IDB Publications (Working Papers) 84673, Inter-American Development Bank.
    12. Irani Arráiz & Marcela Meléndez & Rodolfo Stucchi, 2014. "Partial credit guarantees and firm performance: evidence from Colombia," Small Business Economics, Springer, vol. 43(3), pages 711-724, October.
    13. Keraga, Mezid N. & Stephan, Andreas, 2023. "Does innovation stimulate employment in Africa? New firm-level evidence from the Worldbank Enterprise Survey," Working Paper Series in Economics and Institutions of Innovation 494, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

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    More about this item

    Keywords

    Innovation; Employment; Wages; Policy evaluation; SMEs; Argentina; D2; J23; L8; O31; O33; L26;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • L8 - Industrial Organization - - Industry Studies: Services
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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