Innovation strategies and employment in Latin American firms

Crespi, Gustavo A. and Zuniga, Pluvia (2012). Innovation strategies and employment in Latin American firms. UNU-MERIT.

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UNU-MERIT Working Papers

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  • Sub-type Working paper
    Author Crespi, Gustavo A.
    Zuniga, Pluvia
    Title Innovation strategies and employment in Latin American firms
    Publication Date 2012
    Place of Publication Maastricht
    Publisher UNU-MERIT
    Pages 39
    Abstract This study examines the impact of innovation strategies on employment growth in four Latin American countries (Argentina, Chile, Costa Rica, and Uruguay) using micro-data for manufacturing firms from innovation surveys. Building on the model proposed by Harrison et al. (2008), we relate employment to three innovation strategies: make only (R&D), buy only (external R&D, licensing of patents and know-how, technical assistance, and other external innovation activities) and make and buy (mixed strategy). Firms that conduct in-house innovation activities ("make only") have the greatest impact on employment; the "make and buy" strategy comes in second. Similar results are found for small firms. These results highlight the importance of fostering in-house technological efforts not only for innovation per se, but also to promote growth in firm employment. The impact of "make only" strategies is greater in high-tech industries, whereas "make only" and "make and buy" have a similar impact on employment in low-tech industries. Finally, the study provides evidence of the mechanisms through which innovation strategies affect employment. The findings show that innovation strategies enhance technological innovation, but their impact differs between product and process innovation. Product innovation is mainly motivated by in-house technology investments, followed by mixed strategies, whereas process innovation is basically driven by "buy" strategies.
    Keyword Innovation
    Employment
    External research & development
    Latin America
    Innovation surveys
    JEL O12
    O14
    O31
    O33
    O40
    J21
    Copyright Holder UNU-MERIT
    Copyright Year 2012
    Copyright type Creative commons
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    Created: Wed, 11 Dec 2013, 17:05:46 JST