Innovation%2C%20Research%20and%20Development%20Investment%20and%20Productivity%20in%20Colombian%20Firms

Working Papers

Innovation, Research and Development Investment and Productivity in Colombian Firms


CODE: IDB-WP-251
AUTHOR(s): Arbelaez, Maria Angelica , Parra Torrado, Monica
PUBLISHED: May 2011
LANGUAGE: English
RELATED TOPICS: Microeconomics
DOWNLOAD FILE IN: English

Abstract:

This paper attempts to establish a formal relationship between innovation and productivity using Colombian firm-level data. It is found that the production of goods and services new to the firm and to the domestic market enhances firms` sales per worker, and innovation that results in introducing new goods and services to the international market boosts both sales and Total Factor Productivity (TFP). Innovation in processes likewise improves firms` productivity and sales. Finally, innovation in marketing and management increases sales per worker and enhances TFP when investment is made in Research and Development. The paper also studies the factors behind firms` decision to invest in innovation, the intensity of such investment and the returns to investment in innovation.

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