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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. 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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    3. 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.
    4. 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.
    5. 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.
    6. Andrés Langebaek R. & Diego Vásquez E., 2007. "Determinantes de la actividad innovadora en la industria manufacturera colombiana," Borradores de Economia 2313, Banco de la Republica.
    7. 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.
    8. 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.
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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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