Innovation and productivity in services: Empirical evidence from Latin America

G.A. Crespi, E. Tacsir, F. Vargas

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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.
Original languageEnglish
Place of PublicationMaastricht
PublisherUNU-MERIT
Publication statusPublished - 1 Jan 2014

Publication series

SeriesUNU-MERIT Working Papers
Number069

Cite this

Crespi, G. A., Tacsir, E., & Vargas, F. (2014). Innovation and productivity in services: Empirical evidence from Latin America. UNU-MERIT. UNU-MERIT Working Papers, No. 069