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Innovation and productivity in services: Empirical evidence from Latin America

Author

Listed:
  • Crespi, G.

    () (Inter-American Development Bank)

  • Tacsir, E.

    () (UNU-MERIT)

  • Vargas, F.

    () (UNU-MERIT)

Abstract

This paper analyses and compares the determinants of innovation in the service industry and its impact on labour productivity at the firm level in three countries of Latin America Chile, Colombia, and Uruguay. The main findings show that, similar to what is observed in the manufacturing industry, service firms that invest the most in innovation activities are more likely to introduce changes or improvements in their production process and/or product mix, and those firms that innovate have higher labour productivity than non-innovative firms. Size was found to be a less relevant determinant of innovation in services than in manufacturing, suggesting that the need for infrastructure and associated sunk costs are lower in services. Conversely, cooperation was found to be far more important for innovation in services than in manufacturing, in line with the more interactive nature of innovation in services. Yet, large differences in statistical significance and size of the coefficients of explanatory variables among the countries studied suggest that the framework conditions where a firm operates have an important role in innovation decisions.

Suggested Citation

  • 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).
  • Handle: RePEc:unm:unumer:2014069
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    File URL: https://www.merit.unu.edu/publications/wppdf/2014/wp2014-069.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Javier Lopez Gonzalez & Valentina Meliciani & Maria Savona, 2015. "When Linder Meets Hirschman: Inter-Industry Linkages and Global Value Chains in Business Services," SPRU Working Paper Series 2015-20, SPRU - Science Policy Research Unit, University of Sussex Business School.
    2. 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.
    3. repec:bla:devchg:v:49:y:2018:i:6:p:1495-1525 is not listed on IDEAS
    4. Savona, María, 2016. "Global structural change and value chains in services: a reappraisal," Coediciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 43200.
    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.

    More about this item

    Keywords

    Innovation; Productivity; Services; Service industry; Labour productivity; Products; Production process; Latin America; Chile; Colombia; Uruguay;

    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
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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