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Innovation and Productivity in Services: Evidence from Chile

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  • Roberto Alvarez
  • Andres Zahler
  • Claudio Bravo-Ortega

Abstract

This paper analyzes empirically the relationship between innovation and productivity in the Chilean services sector. Consistent with recent evidence on developed countries, we find that services firms are as innovative as firms in the manufacturing industry. In the basic model, we also find that both industries have similar determinants of the investment in innovation and the probability of introducing innovations (products or process), such as size and export status. In several extensions we find similar roles for technological and non-technological innovation in labor productivity and for determinants such as skill intensity and financial restrictions. In general, our evidence suggests that that innovation input and output is associated with improvements in productivity in both sectors. As extension of the work of Crespi and Zuñiga (2012) we test whether financial constraints are more relevant for either manufactures or services, finding that these seem to be active just for the services sector. We also test for the role of skills finding that they play a central role on the decision to spend in R&D and labor productivity.

Suggested Citation

  • Roberto Alvarez & Andres Zahler & Claudio Bravo-Ortega, 2013. "Innovation and Productivity in Services: Evidence from Chile," Working Papers wp384, University of Chile, Department of Economics.
  • Handle: RePEc:udc:wpaper:wp384
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    References listed on IDEAS

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    Cited by:

    1. Connie Bayudan-Dacuycuy & Lora Kryz C. Baje, 2018. "Assessing the Effects of Simple and Complex Innovation Strategies on the Performance of Firms in the Philippines," Working Papers id:12899, eSocialSciences.
    2. Caterina Santi & Pietro Santoleri, 2017. "Exploring the link between innovation and growth in Chilean firms," Small Business Economics, Springer, vol. 49(2), pages 445-467, August.
    3. Josef Krause, 2016. "Evaluation Of The Impact Of Innovative Activites On Productivity – Example From The Czech Republic," Polish Journal of Management Studies, Czestochowa Technical University, Department of Management, vol. 13(2), pages 101-109, June.
    4. repec:eee:respol:v:47:y:2018:i:10:p:1918-1932 is not listed on IDEAS
    5. Roberto Álvarez, 2016. "The Impact of R&D and ICT Investment on Innovation and Productivity in Chilean Firms," Working Papers wp428, University of Chile, Department of Economics.
    6. Crespi, G. & Tacsir, E. & Vargas, F., 2014. "Innovation and productivity in services: Empirical evidence from Latin America," MERIT Working Papers 069, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    7. repec:nax:conyad:v:64:y:2019:i:1:p:41-42 is not listed on IDEAS

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