The Impact of Innovation on Firm Performance in Peru

Lourdes Alvarez and Angel Bullón
Authors registered in the RePEc Author Service: Lourdes del Pilar Alvarez Chavez and Lourdes del Pilar Alvarez Chávez

MPRA Paper from University Library of Munich, Germany

Abstract: Innovation is a fundamental driver of productivity, playing a pivotal role in fostering market dynamism. This study examines firm-level data from Peru, analyzing innovation activities in small and large enterprises across the manufacturing and services sectors. Employing a rigorous methodological framework—including Fligner–Policello tests, matching techniques, and unconditional quantile treatment effects—the analysis reveals that innovation significantly increases sales growth in large manufacturing firms and service-sector SMEs, while no immediate effects on productivity are detected. Regarding firm longevity, significant impacts are observed exclusively among large manufacturers. These findings indicate that, in contrast to sales, productivity gains from innovation may require a longer horizon to emerge.

Keywords: Business innovation; Sales growth; Labor productivity; Firm longevity; SMEs; Manufacturing and Services. (search for similar items in EconPapers)
JEL-codes: L1 O31 (search for similar items in EconPapers)
Date: 2025-11-19, Revised 2025-10-18
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Published in Working papers at International American Bank 1.32(2026): pp. 25-32

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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:129105

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