| Abstract: |
This paper adapts the Crepon, Duguet, and Mairesse (1998) approach to estimate
the relationship between innovation and productivity and the realities of
innovative activities in developing countries. Panel data for Argentina during
the period 1998-2004 to estimate a structural model in which different types
of firms’ innovative behavior—including in-house activities and the
incorporation of external technologies—feeds into the probability of achieving
successful results in product and process innovation, which in turn explains
labor productivity. The endogeneity of this three-stage process is controlled
for. The results suggest that all types of innovative activities are relevant
to explain success in product and process innovation, and both are important
factors to explain labor productivity. Moreover, investing systematically in
R&D implies an extra payoff in labor productivity. These results suggest that
investing in different types of innovative activities—and not only in R&D—and
doing in-house activities systematically contribute to firms’ innovative and
economic performance. |