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Innovation strategies and employment in Latin American firms

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  • Crespi, Gustavo

    () (Competitiveness and Innovation Division, Institutions for Development Department, Inter-American Development Bank)

  • Zuniga, Pluvia

    () (UNU-MERIT/MGSoG, University of Maastricht)

Abstract

This study examines the impact of innovation strategies on employment growth in four Latin American countries (Argentina, Chile, Costa Rica, and Uruguay) using micro-data for manufacturing firms from innovation surveys. Building on the model proposed by Harrison et al. (2008), we relate employment to three innovation strategies: make only (R&D), buy only (external R&D, licensing of patents and know-how, technical assistance, and other external innovation activities) and make and buy (mixed strategy). Firms that conduct in-house innovation activities ("make only") have the greatest impact on employment; the "make and buy" strategy comes in second. Similar results are found for small firms. These results highlight the importance of fostering in-house technological efforts not only for innovation per se, but also to promote growth in firm employment. The impact of "make only" strategies is greater in high-tech industries, whereas "make only" and "make and buy" have a similar impact on employment in low-tech industries. Finally, the study provides evidence of the mechanisms through which innovation strategies affect employment. The findings show that innovation strategies enhance technological innovation, but their impact differs between product and process innovation. Product innovation is mainly motivated by in-house technology investments, followed by mixed strategies, whereas process innovation is basically driven by "buy" strategies.

Suggested Citation

  • Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation strategies and employment in Latin American firms," MERIT Working Papers 022, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  • Handle: RePEc:unm:unumer:2012022
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    1. Innovation strategies and employment in Latin American firms
      by Maximo Rossi in Wikiprogress América Latina on 2012-04-26 01:01:00

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    1. Necoechea-Mondragón, Hugo & Pineda-Domínguez, Daniel & Pérez-Reveles, Luz & Soto-Flores, Rocío, 2017. "Critical factors for participation in global innovation networks. Empirical evidence from the Mexican nanotechnology sector," Technological Forecasting and Social Change, Elsevier, pages 293-312.
    2. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2014. "Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries," International Journal of Industrial Organization, Elsevier, pages 29-43.
    3. Yeongjun Yeo & Sungmoon Jung & Jeong-Dong Lee & Won-Sik Hwang & Yeongjun Yeo, 2016. "Study on the effect of innovation on employment structure and economic growth: A computable general equilibrium approach," EcoMod2016 9524, EcoMod.
    4. Harrison, Rupert & Jaumandreu Balanzo, Jordi & Mairesse, Jacques & Peters, Bettina, 2008. "Does Innovation Stimulate Employment? A Firm-Level Analysis Using Comparable Micro-Data From Four European Countries," ZEW Discussion Papers 08-111, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    5. Úbeda, Ricardo & Alsua, Carlos & Carrasco, Nelson, 2015. "Purchasing models and organizational performance: a study of key strategic tools," Journal of Business Research, Elsevier, vol. 68(2), pages 177-188.
    6. Georg Licht & Bettina Peters, 2014. "Do Green Innovations stimulate Employment? – Firm-level Evidence From Germany," WWWforEurope Working Papers series 53, WWWforEurope.
    7. Harrison, Rupert & Jaumandreu, Jordi & Mairesse, Jacques & Peters, Bettina, 2014. "Does innovation stimulate employment? A firm-level analysis using comparable micro-data from four European countries," International Journal of Industrial Organization, Elsevier, pages 29-43.
    8. Georg Licht & Bettina Peters, 2013. "The Impact of Green Innovation on Employment Growth in Europe," WWWforEurope Working Papers series 50, WWWforEurope.
    9. Frank, Alejandro Germán & Cortimiglia, Marcelo Nogueira & Ribeiro, José Luis Duarte & Oliveira, Lindomar Subtil de, 2016. "The effect of innovation activities on innovation outputs in the Brazilian industry: Market-orientation vs. technology-acquisition strategies," Research Policy, Elsevier, pages 577-592.
    10. Nestor Duch-Brown & Andrea de Panizza & Ibrahim Kholilul Rohman, 2016. "Innovation and productivity in a S&T intensive sector: the case of Information industries in Spain," JRC Working Papers JRC101847, Joint Research Centre (Seville site).
    11. Jung, Sungmoon & Lee, Jeong-Dong & Hwang, Won-Sik & Yeo, Yeongjun, 2017. "Growth versus equity: A CGE analysis for effects of factor-biased technical progress on economic growth and employment," Economic Modelling, Elsevier, vol. 60(C), pages 424-438.

    More about this item

    Keywords

    innovation; employment; external R&D; Latin America; innovation surveys;

    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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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