This paper studies the relationships between investment in research
and development (r&d), innovation and productivity in the Chilean
manufacturing industry using data from four waves of the national
Technological Innovation Survey during the past decade. The analysis
is based on a multi-equation model that takes into account the whole
process of innovation, considering the determinants of firms’ decisions
to engage in innovation activities, the results of those efforts in terms of
innovation and their impact on productivity. It is found that: (a) larger plants
are more likely to invest in r&d, (b) r&d intensity increases the probability
of process innovation, (c) r&d intensity does not affect the probability
of product innovation, (d) low appropriability reduces the probability of
process innovation, (e) larger firms are more likely to introduce product
innovation, and (f) process innovation increases productivity.