| Abstract: |
The impact of size and competition on firm-level innovative activities has
obtained considerable attention in developed countries, but the focus is still
lacking in developing world. This paper is an attempt to contribute in this
direction by including 14 Latin American countries, and by using Enterprise
Survey data of the World Bank. We consider both input and output innovation to
observe the influence of firm size and of market concentration on innovative
activities, and to interrogate the differences in influences of innovation
determinants in different size classes and competition statuses. Our analysis
reveals that employment increases the likelihood of R&D and product
innovation, and its influence on R&D expenditures is positive but at less than
proportionate rate. We find that product market competition increases the
probability of both R&D decision and innovation output, but it has no
influence on R&D intensity. We observe no relationship between R&D
expenditures per employee and product innovation. Country and industry
differences also contribute substantially towards firm-level R&D activities
and product innovation. Moreover, large or small firms do no tend to be
advantageous for employment and competition in order to influence R&D
activities; however, for product innovation, competition is a more significant
stimulus for large firms compared to small ones. Our results suggest that
firms' R&D productivity is independent of size classes and competition
environments. All of the determinants (of innovation) are jointly observed to
have different effects, for large and small firms, as explanatory factors of
both R&D intensity and product innovation, and for different competition
environments only for product innovation. |