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Innovation and productivity in services: Empirical evidence from Latin America

Gustavo Crespi (), Ezequiel Tacsir () and Fernando Vargas

No 69, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: This paper analyses and compares the determinants of innovation in the service industry and its impact on labour productivity at the firm level in three countries of Latin America Chile, Colombia, and Uruguay. The main findings show that, similar to what is observed in the manufacturing industry, service firms that invest the most in innovation activities are more likely to introduce changes or improvements in their production process and/or product mix, and those firms that innovate have higher labour productivity than non-innovative firms. Size was found to be a less relevant determinant of innovation in services than in manufacturing, suggesting that the need for infrastructure and associated sunk costs are lower in services. Conversely, cooperation was found to be far more important for innovation in services than in manufacturing, in line with the more interactive nature of innovation in services. Yet, large differences in statistical significance and size of the coefficients of explanatory variables among the countries studied suggest that the framework conditions where a firm operates have an important role in innovation decisions.

Keywords: Innovation; Productivity; Services; Service industry; Labour productivity; Products; Production process; Latin America; Chile; Colombia; Uruguay (search for similar items in EconPapers)
JEL-codes: O12 O14 O31 O33 O40 O54 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse, nep-eff, nep-ent, nep-ino, nep-knm, nep-lam, nep-sbm and nep-tid
Date: 2014-07-31
References: View references in EconPapers View complete reference list from CitEc
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