Browsing by Author "Montégu, José Pablo"

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    Drivers of R&D investment, innovation, and productivity in Chilean firms: the role of competition and international trade
    (2019) Montégu, José Pablo; Pertuzé Salas, Julio; Pontificia Universidad Católica de Chile. Escuela de Ingeniería
    In the Chilean business sector, research and development (R&D), innovation and productivity indicators lag far behind the figures reported in the most advanced economies. However, there is scarce empirical evidence on what is driving and hindering improvement in such areas. This work contributes to clarify the relationship between R&D investment, innovation, and labor productivity in Chilean firms by analyzing in depth the role of competition and international trade in this process. Our ability to explore these topics is made possible by merging two recent economic surveys and applying a microeconometric model that allows us to correct for selection bias and endogeneity. On the one hand, the results show that competition and R&D intensity are linked by an inverse U-shaped curve, but the estimated effects of competition on innovation output and labor productivity turn out to be rather ambiguous. This suggests that market structure has an impact on the incentives to innovate, but not necessarily on the firms’ innovative success. On the other hand, the results indicate that international trade can promote innovation and productivity. More specifically, we show that being a two-way trader (i.e., a firm that both imports and exports) enhances product innovation and labor productivity. We advance the argument that such an advantage is based on different complementarities between importing and exporting activities.