IDEAS home Printed from https://ideas.repec.org/p/idb/brikps/1985.html
   My bibliography  Save this paper

Innovation and Productivity: Evidence from Six Latin American Countries

Author

Listed:
  • Crespi, Gustavo
  • Zuñiga, Pluvia

Abstract

This study examines the determinants of technological innovation and its impact on firm labor productivity across six Latin American countries (Argentina, Chile, Colombia, Costa Rica, Panama, and Uruguay) using micro data from innovation surveys. In line with the literature, in all countries firms that invest in knowledge are more able to introduce new technological advances, and those that innovate have greater labor productivity than those that do not. Yet firm-level determinants of innovation investment are much more heterogeneous than in OECD countries. Cooperation, foreign ownership, and exporting increase the propensity to invest in innovation activities and encourage innovation investment in only half of the countries studied. Scientific and market sources of information have little or no impact on firm innovation efforts, which illustrates the weak linkages that characterize national innovation systems in those countries. The results in terms of productivity, however, highlight the importance of innovation in enabling firms to improve economic performance and catch up.

Suggested Citation

  • Crespi, Gustavo & Zuñiga, Pluvia, 2011. "Innovation and Productivity: Evidence from Six Latin American Countries," IDB Publications (Working Papers) 1985, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:1985
    as

    Download full text from publisher

    File URL: https://publications.iadb.org/publications/english/document/Innovation-and-Productivity-Evidence-from-Six-Latin-American-Countries.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Francesco Bogliacino & Giulio Perani & Mario Pianta & Stefano Supino, 2010. "Innovation and Development. The Evidence from Innovation Surveys," Working Papers of BETA 2010-13, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    2. Jose Miguel Benavente, 2006. "The role of research and innovation in promoting productivity in chile," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 301-315.
    3. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    4. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    5. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    6. Pierre Mohnen & Jacques Mairesse & Marcel Dagenais, 2006. "Innovativity: A comparison across seven European countries," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 391-413.
    7. Bronwyn Hall & Jacques Mairesse, 2006. "Empirical studies of innovation in the knowledge-driven economy," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 289-299.
    8. Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
    9. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    10. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133, National Bureau of Economic Research, Inc.
    11. Micheline Goedhuys, 2007. "Learning, product innovation, and firm heterogeneity in developing countries; Evidence from Tanzania," Industrial and Corporate Change, Oxford University Press, vol. 16(2), pages 269-292, April.
    12. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45, National Bureau of Economic Research, Inc.
    13. Veugelers, Reinhilde & Cassiman, Bruno, 1999. "Make and buy in innovation strategies: evidence from Belgian manufacturing firms," Research Policy, Elsevier, vol. 28(1), pages 63-80, January.
    14. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
    15. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1.
    16. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
    17. Bronwyn Hall & Alessandro Maffioli, 2008. "Evaluating the impact of technology development funds in emerging economies: evidence from Latin America," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 172-198.
    18. Yuriy Gorodnichenko & Monika Schnitzer, 2013. "Financial Constraints And Innovation: Why Poor Countries Don'T Catch Up," Journal of the European Economic Association, European Economic Association, vol. 11(5), pages 1115-1152, October.
    19. Valeria Arza & Andres Lopez, 2010. "Innovation and Productivity in the Argentine Manufacturing Sector," Research Department Publications 4681, Inter-American Development Bank, Research Department.
    20. Ariel Pakes & Zvi Griliches, 1980. "Patents and R and D at the Firm Level: A First Look," NBER Working Papers 0561, National Bureau of Economic Research, Inc.
    21. Ariel Pakes & Zvi Griliches, 1984. "Patents and R&D at the Firm Level: A First Look," NBER Chapters, in: R&D, Patents, and Productivity, pages 55-72, National Bureau of Economic Research, Inc.
    22. Jacques Mairesse & Pierre Mohnen & Elizabeth Kremp, 2005. "The Importance of R&D and Innovation for Productivity: A Reexamination in Light of the 2000 French Innovation Survey," Annals of Economics and Statistics, GENES, issue 79-80, pages 487-527.
    23. Roberto Alvarez & Claudio Bravo-Ortega & Lucas Navarro, 2010. "Innovation, R&D Investment and Productivity in Chile," Research Department Publications 4691, Inter-American Development Bank, Research Department.
    24. João Alberto De Negri & Luiz Esteves & Fernando Freitas, 2007. "Knowledge production and firm growth in Brazil," Working Papers 0057, Universidade Federal do Paraná, Department of Economics.
    25. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
    26. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    27. Micheline Goedhuys & Norbert Janz & Pierre Mohnen, 2014. "Knowledge-based productivity in "low-tech" industries: evidence from firms in developing countries," Industrial and Corporate Change, Oxford University Press, vol. 23(1), pages 1-23, February.
    28. Sourafel Girma & Holger Görg, 2016. "Multinationals’ Productivity Advantage: Scale Or Technology?," World Scientific Book Chapters, in: MULTINATIONAL ENTERPRISES AND HOST COUNTRY DEVELOPMENT Volume 53: World Scientific Studies in International Economics, chapter 1, pages 3-15, World Scientific Publishing Co. Pte. Ltd..
    29. Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation and Productivity: Evidence from Six Latin American Countries," World Development, Elsevier, vol. 40(2), pages 273-290.
    30. Gary Jefferson & Bai Huamao & Guan Xiaojing & Yu Xiaoyun, 2006. "R&D Performance in Chinese industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 345-366.
    31. Cohen, Wesley M. & Levin, Richard C., 1989. "Empirical studies of innovation and market structure," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 18, pages 1059-1107, Elsevier.
    32. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    33. Julio Raffo & Stephane Lhuillery & Luis Miotti, 2008. "Northern and southern innovativity: a comparison across European and Latin American countries," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 219-239.
    34. Adriana Cassoni & Magdalena Ramada, 2010. "Innovation, R&D Investment and Productivity: Uruguayan Manufacturing Firms," Research Department Publications 4680, Inter-American Development Bank, Research Department.
    35. Jaan Masso & Priit Vahter, 2008. "Technological innovation and productivity in late-transition Estonia: econometric evidence from innovation surveys," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 240-261.
    36. Petri Rouvinen, 2002. "R&D—Productivity Dynamics: Causality, Lags, and ‘Dry Holes’," Journal of Applied Economics, Taylor & Francis Journals, vol. 5(1), pages 123-156, May.
    37. Irwin, Douglas A. & Klenow, Peter J., 1996. "High-tech R&D subsidies Estimating the effects of Sematech," Journal of International Economics, Elsevier, vol. 40(3-4), pages 323-344, May.
    38. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    39. Pakes, Ariel & Griliches, Zvi, 1980. "Patents and R&D at the firm level: A first report," Economics Letters, Elsevier, vol. 5(4), pages 377-381.
    40. Goedhuys, Micheline, 2007. "The impact of innovation activities on productivity and firm growth: evidence from Brazil," MERIT Working Papers 2007-002, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    41. Kumar, Nagesh & Aggarwal, Aradhna, 2005. "Liberalization, outward orientation and in-house R&D activity of multinational and local firms: A quantitative exploration for Indian manufacturing," Research Policy, Elsevier, vol. 34(4), pages 441-460, May.
    42. Roper, Stephen & Du, Jun & Love, James H., 2008. "Modelling the innovation value chain," Research Policy, Elsevier, vol. 37(6-7), pages 961-977, July.
    43. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    44. Michael L. Katz, 1986. "An Analysis of Cooperative Research and Development," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 527-543, Winter.
    45. George Van Leeuwen & Luuk Klomp, 2006. "On the contribution of innovation to multi-factor productivity growth," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 367-390.
    46. Loof, Hans & Heshmati, Almas, 2002. "Knowledge capital and performance heterogeneity: : A firm-level innovation study," International Journal of Production Economics, Elsevier, vol. 76(1), pages 61-85, March.
    47. Braga, Helson & Willmore, Larry, 1991. "Technological Imports and Technological Effort: An Analysis of Their Determinants in Brazilian Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 39(4), pages 421-432, June.
    48. Keunjae Lee & Sang-Mok Kang, 2007. "Innovation Types and Productivity Growth: Evidence from Korean Manufacturing Firms," Global Economic Review, Taylor & Francis Journals, vol. 36(4), pages 343-359.
    49. Valeria Arza & Andres Lopez, 2010. "Innovation and Productivity in the Argentine Manufacturing Sector," Research Department Publications 4681, Inter-American Development Bank, Research Department.
    50. Kamien, Morton I. & Oren, Shmuel S. & Tauman, Yair, 1992. "Optimal licensing of cost-reducing innovation," Journal of Mathematical Economics, Elsevier, vol. 21(5), pages 483-508.
    51. Cohen, Wesley M & Klepper, Steven, 1996. "Firm Size and the Nature of Innovation within Industries: The Case of Process and Product R&D," The Review of Economics and Statistics, MIT Press, vol. 78(2), pages 232-243, May.
    52. repec:adr:anecst:y:2005:i:79-80:p:19 is not listed on IDEAS
    53. repec:crs:wpaper:9833 is not listed on IDEAS
    54. Adriana Cassoni & Magdalena Ramada, 2010. "Innovation, R&D Investment and Productivity: Uruguayan Manufacturing Firms," Research Department Publications 4680, Inter-American Development Bank, Research Department.
    55. Chudnovsky, Daniel & Lopez, Andres & Pupato, German, 2006. "Innovation and productivity in developing countries: A study of Argentine manufacturing firms' behavior (1992-2001)," Research Policy, Elsevier, vol. 35(2), pages 266-288, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Crespi G.A. & Tacsir E. & Vargas F., 2014. "Innovation dynamics and productivity : evidence for Latin America," MERIT Working Papers 2014-092, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Son Thi Kim Le, 2019. "Innovation efforts in developing countries: The case of Vietnamese small and medium-sized enterprises," WIDER Working Paper Series wp-2019-7, World Institute for Development Economic Research (UNU-WIDER).
    3. Mairesse, Jacques & Mohnen, Pierre, 2010. "Using Innovation Surveys for Econometric Analysis," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1129-1155, Elsevier.
    4. Adriana Cassoni & Magdalena Ramada, 2010. "Innovation, R&D Investment and Productivity: Uruguayan Manufacturing Firms," Research Department Publications 4680, Inter-American Development Bank, Research Department.
    5. Wadho, Waqar & Chaudhry, Azam, 2020. "Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan," GLO Discussion Paper Series 466, Global Labor Organization (GLO).
    6. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    7. Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, vol. 33(1), pages 13-33, June.
    8. Mario D. Tello, 2015. "Firms' Innovation, Public Financial Support, and Total Factor Productivity: The Case of Manufactures in Peru," Review of Development Economics, Wiley Blackwell, vol. 19(2), pages 358-374, May.
    9. Hall, B.H., 2011. "Innovation and productivity," MERIT Working Papers 2011-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    10. Wadho, Waqar & Chaudhry, Azam, 2018. "Innovation and firm performance in developing countries: The case of Pakistani textile and apparel manufacturers," Research Policy, Elsevier, vol. 47(7), pages 1283-1294.
    11. Pierre Mohnen & Bronwyn Hall, 2013. "Innovation and Productivity: An Update," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 47-65, June.
    12. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    13. Burcu Fazlıoğlu & Başak Dalgıç & Ahmet Burçin Yereli, 2019. "The effect of innovation on productivity: evidence from Turkish manufacturing firms," Industry and Innovation, Taylor & Francis Journals, vol. 26(4), pages 439-460, April.
    14. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2018. "Internationalisation, innovation and productivity in services: evidence from Germany, Ireland and the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(3), pages 585-615, August.
    15. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    16. Betarelli Junior, Admir Antonio & Faria, Weslem Rodrigues & Gonçalves Montenegro, Rosa Livia & Bahia, Domitila Santos & Gonçalves, Eduardo, 2020. "Research and development, productive structure and economic effects: Assessing the role of public financing in Brazil," Economic Modelling, Elsevier, vol. 90(C), pages 235-253.
    17. Busom, Isabel & Vélez-Ospina, Jorge Andrés, 2017. "Innovation, Public Support, and Productivity in Colombia. A Cross-industry Comparison," World Development, Elsevier, vol. 99(C), pages 75-94.
    18. M. Constanza Demmel & Juan A. Máñez & María E. Rochina-Barrachina & Juan A. Sanchis-Llopis, 2013. "Innovation and productivity: evidence for 4 Latin American countries manufacturing industry," Working Papers 1307, Department of Applied Economics II, Universidad de Valencia.
    19. Alejandro García-Pozo & Juan Antonio Campos-Soria & J. Aníbal Núñez-Carrasco, 2021. "Technological innovation and productivity across Spanish regions," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 67(1), pages 167-187, August.
    20. Huang C. & Wu Y. & Mohnen P. & Zhao Y., 2013. "Government support, innovation and productivity in the Haidian (Beijing) District," MERIT Working Papers 2013-058, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    IDB-WP-218;

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • 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
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:idb:brikps:1985. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: . General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Felipe Herrera Library (email available below). General contact details of provider: https://edirc.repec.org/data/iadbbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.