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Innovation and Productivity in the Argentine Manufacturing Sector

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  • Valeria Arza
  • Andres Lopez

Abstract

This paper adapts the Crepon, Duguet, and Mairesse (1998) approach to estimate the relationship between innovation and productivity and the realities of innovative activities in developing countries. Panel data for Argentina during the period 1998-2004 to estimate a structural model in which different types of firms’ innovative behavior—including in-house activities and the incorporation of external technologies—feeds into the probability of achieving successful results in product and process innovation, which in turn explains labor productivity. The endogeneity of this three-stage process is controlled for. The results suggest that all types of innovative activities are relevant to explain success in product and process innovation, and both are important factors to explain labor productivity. Moreover, investing systematically in R&D implies an extra payoff in labor productivity. These results suggest that investing in different types of innovative activities—and not only in R&D—and doing in-house activities systematically contribute to firms’ innovative and economic performance.

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Bibliographic Info

Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4681.

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Date of creation: Aug 2010
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Handle: RePEc:idb:wpaper:4681

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Keywords: Innovation; Productivity; Argentina;

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  1. Lööf, Hans & Heshmati, Almas, 2000. "Knowledge Capital and Performance Heterogeneity: A Firm Level Innovation Study," Working Paper Series in Economics and Finance 387, Stockholm School of Economics, revised 14 Aug 2000.
  2. Lööf, Hans & Heshmati, Almas & Asplund, Rita & Nåås, Svein-Olav, 2001. "Innovation and Performance in Manufacturing Industries: A Comparison of the Nordic Countries," Working Paper Series in Economics and Finance 0457, Stockholm School of Economics.
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Cited by:
  1. Gustavo Crespi & Pluvia Zuniga, 2010. "Innovation and Productivity - Evidence from Six Latin American Countries," Research Department Publications 4690, Inter-American Development Bank, Research Department.

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