How do firms innovate in Latin America? Identification of innovation strategies and their main adoption determinants

The study of innovation in Latin American firms has concentrated almost
exclusively on the determinants and impacts of innovation investments
and outputs. Less attention has been paid to how firms innovate. This
study applies factor and cluster analysis to a unique dataset of
harmonized innovation surveys from Argentina, Chile, Colombia, Ecuador,
El Salvador, Paraguay, Peru, and Uruguay, to identify the main
innovation practices and strategies performed by Latin American firms.
Three of the four identified innovation strategies can be linked to
results from similar studies using European firm-level data. However,
none of these strategies resembles a strong science or research
orientation. An approach to "open management" innovation emerges as
idiosyncratic for Latin American firms. These innovation strategies are
associated with differences in sales growth and labor productivity. The
analysis also shows that firm resources and capabilities drive
innovation strategy selection.