Innovation for economic performance: the case of Latin American firms

Abstract

In this note, a wide range of innovation indicators are analysed in order to describe the innovation behaviour of manufacturing firms in LAC using the recently released Enterprise Surveys 2010. The Enterprise Surveys define innovation rates as the share of firms introducing product and process innovations. The survey also measures the proportion of firms investing in research and development (R&D) and filing for intellectual property rights (IPRs). The aim of this note is to understand the main characteristics of innovative firms and to gather new evidence with regard to the nature of the innovation process in the region. Statistics about the performance of LAC firms are provided using different types of indicators to measure firms' innovative behaviour. In particular, differences in innovation performance and effort by country, sector, and key firm characteristics, such as being a multinational or exporter, are explored. Those firms in LAC that are top R&D performers are identified, and the analysis closes with an exploration of firm characteristics that strongly correlate with the probability of being a top R&D performer in the region. JEL Classification: D22, O3, O33, O34

Impact of competition from unregistered firms on R&D investment by industrial sectors in emerging economies

“…However, in an institutional context where an emerging market with a high level of IPRI such as Chile (good support institutions and market factors) (Glass and Saggi, 2002;Hoskisson et al, 2013) decreases imitation activities, we propose that the high technological dynamism that is characteristic of science-based industries (such as chemicals, pharmaceuticals, and electronics) are less likely to be imitated by unregistered firms (Bogliacino and Pianta, 2010;Crespi et al, 2014;Pavitt, 1984). These industries focus on R&D to create or attract external sources of knowledge based on advances in scientific patents.…”

“…In supplier-dominated industries, small firms are prevalent with low fixed costs, moderately differentiated products and low entry barriers. Additionally, supplier-dominated industry innovation efforts are principally focused on the purchase of machinery and are rarely based on R&D activities (Bogliacino and Pianta, 2010;Crespi et al, 2014;Flor and Oltra, 2005;Pavitt, 1984). Therefore, unregistered firms are able to compete with formal supplier-dominated firms for the same costumers and products.…”

“…These industries focus on R&D to create or attract external sources of knowledge based on advances in scientific patents. Therefore, it is likely impossible for unregistered firms to achieve this (Crespi et al, 2014). In addition, a high level of IPRI encourages a formal firm to explore new knowledge.…”

“…This variable allows us to evaluate the variation of R&D as a variable that captures the ability of the organization to adapt to the competition from unregistered firms. Moreover, R&D investment is a proxy of the absorptive capability (Crespi et al, 2014;Wang and Ahmed, 2007). It is closely related to the organizational learning ambidexterity of the firm, which is the ability to explore knowledge through internal R&D investment or exploit external knowledge through a reduction in internal R&D.…”

The moderating effects of economic development on innovation and shadow entrepreneurship: grey or pink?

“…Within this framework, innovation‐related efforts cannot solely concentrate on the acquisition of new machinery but have to rather incorporate R&D activities (Crespi et al, 2014; Williams and Martinez‐Perez, 2014). Due to these human capital shortcomings and the low level of technological development that hinders their capacity to supply the sophisticated products that are increasingly demanded by their clients (Distinguin et al, 2016; Fu et al, 2017).…”