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Innovation, R&D Investment and Productivity in Colombian Firms

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  • Arbeláez, María Angélica
  • Parra Torrado, Mónica

Abstract

This paper attempts to establish a formal relationship between innovation and productivity using Colombian firm-level data. It is found that the production of goods and services new to the firm and to the domestic market enhances firms' sales per worker, and innovation that results in introducing new goods and services to the international market boosts both sales and Total Factor Productivity (TFP). Innovation in processes likewise improves firms' productivity and sales. Finally, innovation in marketing and management increases sales per worker and enhances TFP when investment is made in Research and Development. The paper also studies the factors behind firms' decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

Suggested Citation

  • Arbeláez, María Angélica & Parra Torrado, Mónica, 2011. "Innovation, R&D Investment and Productivity in Colombian Firms," IDB Publications (Working Papers) 3074, Inter-American Development Bank.
    • Handle: RePEc:idb:brikps:3074
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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.
    2. Emmanuel Duguet, 2006. "Innovation height, spillovers and tfp growth at the firm level: Evidence from French manufacturing," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 415-442.
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    4. Alejandro Alvarado B., 2000. "Dinámica de la estrategia de innovación: el caso de Colombia," Coyuntura Económica, Fedesarrollo, September.
    5. 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.
    6. Andrés Langebaek R. & Diego M. Vásquez E., 2007. "Determinantes de la actividad Innovadora en la industria manufacturera colombiana," Coyuntura Económica, Fedesarrollo, June.
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    Citations

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    Cited by:

    1. Lin, Chia-Ling & Lin, Hui-Lin & Lin, Eric S., 2016. "Is There A Complementary Relationship Between Product And Process Innovation On Productivity In Taiwanese Manufacturing Firms?," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 57(2), pages 139-173, December.
    2. 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

    IDB-WP-251; Innovation; Productivity; Economic performance; Total factor productivity; Generalized Tobit model; Firm-level data; Colombia;
    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
    • 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
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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