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Innovation, R&D Investment and Productivity in Colombia

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  • María Angélica Arbeláez
  • Mónica Parra Torrado

Abstract

The main objective of this paper is to establish a formal relationship between innovation and performance using Colombian firm-level data. We find that, as predicted by the literature, the production of goods and services new to the firm and to the domestic market enhances firms´ productivity and sales. In the same way, innovation in management and marketing boosts firms´ productivity and sales. However, contrary to theoretical predictions, the production of goods and services new to the international market has a strong negative impact on TFP, although it largely increases sales when firms invest in R&D. We also study the factors behind the firms´ decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

Suggested Citation

  • María Angélica Arbeláez & Mónica Parra Torrado, 2009. "Innovation, R&D Investment and Productivity in Colombia," Informes de Investigación 9062, Fedesarrollo.
    • Handle: RePEc:col:000124:009062
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    File URL: http://hdl.handle.net/11445/215
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    References listed on IDEAS

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    1. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    2. Andrés Langebaek R. & Diego Vásquez E., 2007. "Determinantes de la actividad innovadora en la industria manufacturera colombiana," Borradores de Economia 433, Banco de la Republica de Colombia.
    3. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    4. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    5. Pablo D'Este & Simona Iammarino & Maria Savona & Nick von Tunzelmann, 2008. "What hampers innovation? Evidence from the UK CIS4," SPRU Working Paper Series 168, SPRU - Science Policy Research Unit, University of Sussex Business School.
    6. Jaan Masso & Priit Vahter, 2008. "Technological innovation and productivity in late-transition Estonia: econometric evidence from innovation surveys," The European Journal of Development Research, Taylor and Francis Journals, vol. 20(2), pages 240-261.
    7. Lööf, Hans & Heshmati, Almas & Asplund, Rita & Nåås, Svein-Olav, 2001. "Innovation and Performance in Manufacturing Industries: A Comparison of the Nordic Countries," SSE/EFI Working Paper Series in Economics and Finance 0457, Stockholm School of Economics.
    8. Jose Miguel Benavente, 2006. "The role of research and innovation in promoting productivity in chile," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 301-315.
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    Cited by:

    1. José Luis Nolazco, 2020. "Efectos entre las actividades de innovación, exportación y productividad: un análisis de las empresas manufactureras peruanas," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 85(2), June.

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    More about this item

    Keywords

    Innovation; Productivity; Economic Performance; Total Factor Productivity; Generalized Tobit model; Firm-level data; Colombia.Desarrollo industrial; Innovaciones; Productividad.;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • C34 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Truncated and Censored Models; Switching Regression Models
    • C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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