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Innovation, public support and productivity in colombia

Isabel Busom () and Jorge-Andrés Vélez-Ospina ()
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Jorge-Andrés Vélez-Ospina: Departament d'Empresa, Universitat Autonoma de Barcelona

Authors registered in the RePEc Author Service: Jorge Andres Velez-Ospina

Working Papers from Department of Applied Economics at Universitat Autonoma of Barcelona

Abstract: We investigate the association between perceived barriers to innovation and the allocation of public support for innovation in manufacturing and service industries in Colombia, as well as the potential heterogeneity of returns to innovation across the firm-level productivity distribution. We extend the CDM recursive system by including an equation for the allocation of direct support and using quantile regression methods to estimate the productivity equation. We find some differences across manufacturing and service industries. Financing constraints are correlated with obtaining public support in manufacturing and in some services, but in knowledge intensive services (KIS) barriers associated with regulations are more significant. The introduction of innovations increases mostly the productivity of firms below the median of the productivity distribution, especially in services. Increasing human capital would boost productivity of firms in all industries, providing support to the hypothesis that human capital is indeed a bottleneck for productivity growth across the board in Colombia. We conclude that addressing factors that hinder innovation by low productivity firms in all service industries could significantly contribute to increasing productivity and reduce its dispersion.

JEL-codes: O31 O32 O33 O40 L8 C30 (search for similar items in EconPapers)
Pages: 45 pages
Date: 2017-01
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ino, nep-sbm and nep-tid
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