Innovation and Firm Productivity in Central America

Asiedu, Michael; Effah, Nana Adwoa Anokye; Arthur, Benedict

doi:10.1007/s13132-023-01321-w

Cited by 2 publications

(1 citation statement)

References 60 publications

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“…Furthermore, the estimates corresponding to R&D intensity are never significant, which might be explained by the limited number of firms investing in these activities (23.5% on average), the important gap from the technological frontier, and the limited incentives to invest in these activities (Crespi et al, 2016). These findings are in line with those found for some countries in Latin America; see Asiedu et al (2023) In summary, our findings underscore that considering past cross-effects between process and product innovations also plays a crucial role in determining the magnitude of the estimated effects. Hence, it is crucial to account for both factors when examining the selfselection dynamics in firms' adoption of process and product innovations.…”

Section: On the Relationship Between Innovations And Productivitysupporting

confidence: 72%

The dynamic links between product and process innovations and productivity for Colombian manufacturing

Sanchis Llopis,

Mañez,

Gómez-Sánchez

2024

AEA

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Purpose This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between these strategies, for Colombia. The authors first explore whether ex ante more productive firms are those that introduce innovations (the self-selection hypothesis) and if the introduction of innovations boosts TFP growth (the returns-to-innovation hypothesis). Second, the authors study the firm’s joint dynamic decision to implement process and/or product innovations. The authors use Colombian manufacturing data from the Annual Manufacturing and the Technological Development and Innovation Surveys. Design/methodology/approach This study uses a four-stage procedure. First, the authors estimate TFP using a modified version of Olley and Pakes (1996) and Levinsohn and Petrin (2003), proposed by De Loecker (2010), that implements an endogenous Markov process where past firm innovations are endogenized. This TFP would be estimated by GMM, Wooldridge (2009). Second, the authors use multivariate discrete choice models to test the self-selection hypothesis. Third, the authors explore, using multi-value treatment evaluation techniques, the life span of the impact of innovations on productivity growth (returns to innovation hypothesis). Fourth, the authors analyse the joint likelihood of implementing process and product innovations using dynamic panel data bivariate probit models. Findings The investigation reveals that the self-selection effect is notably more pronounced in the adoption of process innovations only, as opposed to the adoption of product innovations only or the simultaneous adoption of both process and product innovations. Moreover, our results uncover distinct temporal patterns concerning innovation returns. Specifically, process innovations yield immediate benefits, whereas implementing both product innovations only and jointly process and product innovations exhibit significant, albeit delayed, advantages. Finally, the analysis confirms the existence of dynamic interconnections between the adoption of process and product innovations. Originality/value The contribution of this work to the literature is manifold. First, the authors thoroughly investigate the relationship between the implementation of process and product innovations and productivity for Colombian manufacturing explicitly recognising that firms’ decisions of adopting product and process innovations are very likely interrelated. Therefore, the authors start exploring the self-selection and the returns to innovation hypotheses accounting for the fact that firms might implement process innovations only, product innovations only and both process and product innovations. In the analysis of the returns of innovation, the fact that firms may choose among a menu of three innovation strategies implies the use of evaluation methods for multi-value treatments. Second, the authors study the dynamic inter-linkages between the decisions to implement process and/or product innovations, that remains under studied, at least for emerging economies. Third, the estimation of TFP is performed using an endogenous Markov process, where past firms’ innovations are endogenized.

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Section: On the Relationship Between Innovations And Productivitysupporting

confidence: 72%

The dynamic links between product and process innovations and productivity for Colombian manufacturing

Sanchis Llopis,

Mañez,

Gómez-Sánchez

2024

AEA

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Digitalization and productivity in the Chinese wind power industry: the serial mediating role of reconfiguration capability and technological innovation

Jiang,

Shi,

Liu

2024

BPMJ

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PurposeWind power is the most promising renewable energy source in China. The development of digital technologies has brought about unprecedented growth opportunities and prospects for wind power. However, the relationship between digital technology adoption and total factor productivity (TFP) in the wind power industry in China has not been empirically assessed. This study aims to clarify whether and how digital technology adoption affects the TFP of the wind power industry in China.Design/methodology/approachBased on the data of listed companies in the Chinese wind power industry from 2006 to 2021, this study proposes and verifies relevant hypotheses with two-way fixed effects regression models.FindingsThe empirical results indicate that digital technology adoption is the cornerstone of the TFP of China’s wind power industry. Reconfiguration capability and technological innovation serially mediate the above relationship. In addition, the incentive effect of digital technology adoption varies among wind power firms. The impact of digital technology adoption is more significant in firms that are old and located in economically undeveloped regions.Originality/valueThis study is one of the earliest attempts to investigate the relationship between digital technology adoption and TFP in the renewable energy sectors of emerging economies. By integrating dynamic capability theory and the analytical framework of “Capability-Behavior-Performance” into the digital context, this study offers the theoretical insights into how digital technology adoption can enhance organizational reconfiguration capability, thereby stimulating technological innovation and subsequent TFP. Additionally, the impacts of different digital technologies are estimated in entirety, rather than in isolation.

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Innovation and Firm Productivity in Central America

Cited by 2 publications

References 60 publications

The dynamic links between product and process innovations and productivity for Colombian manufacturing

The dynamic links between product and process innovations and productivity for Colombian manufacturing

Digitalization and productivity in the Chinese wind power industry: the serial mediating role of reconfiguration capability and technological innovation

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