The Role of Research and Innovation in Promoting Productivity in Chile

Abstract

This paper continues the empirical research line started by Crepon et al. (Crepon, B., Duguet, E. and Mairesse, J. (1998) Research, Innovation, and Productivity: An Econometric Analysis at the Firm Level. Economics of Innovation and New Technology, 7(2), 115-158.) about the impact of research and development on innovation and innovation on productivity of firms. In this paper, we estimate a structural model using asymptotic least squares, which corrects for selectivity and simultaneity biases taking into consideration the particular characteristics of the available data. We find that most of the Schumpeterian hypotheses are confirmed: research and innovative activities are related with firm size and market power. However, in the case of Chile, firms' productivity is not affected by innovative results, nor by research expenditures in the short run.