Browsing by Author "Reyes Torres, Tomas Hernán"

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    Employment, Firm Size, and Persistent Innovation: Evidence from an Emerging Economy
    (2022) Parrao Cartagena, Alejandra Luz; Reyes Torres, Tomas Hernán; Cruz Novoa, Alfonso; Schon Molina, Kristel
    The relationship between innovation and employment dynamics of firms has been an appealing topic to researchers and policymakers during the last decades. In that context, this paper investigates the impact of innovation persistence on firms’ employment. Following the approach of Bianchini & Pellegrino (2019), we analyze how innovation persistence is related to employment growth rates and employment growth sustainability in an emerging market country like Chile. We also study the moderator effect that firm size has on the relationship between innovation persistence and employment. For our empirical analysis, we use survival analysis and a GMM estimator for assessing this relationship in a 10-year panel database of firms based on innovation surveys, measuring innovation persistence through the hazard rate of innovation spells. Our results show that innovation persistence is positively related to employment and that firm size plays a negative moderating role in the relationship between persistent innovation and both employment growth rates and employment growth sustainability.
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    How Innovation Impacts Firm Growth Dynamics in Natural Resource Industries
    (2022) Sevil, Angel; Cruz Novoa, Alfonso; Reyes Torres, Tomas Hernán; Vassolo, Roberto Santiago
    Growth has generally been considered a crucial objective for a firm, and, consequently, it has become one of the most researched subjects in economic sciences. This paper aims to provide an in-depth study of how incremental innovation, a ubiquitous factor, affects the growth of small and large-sized firms differently. Specifically, this work examines firm growth dynamics in natural resource industries. In these industries, innovation is mainly based on processes in the form of incremental changes, and adoption of innovations has significant sunk costs. We argue that, before incremental process innovation, firm growth is directly proportional to firm size. However, in the presence of incremental innovation events, firm growth is indirectly proportional to firm size, since smaller firms pose higher strategic flexibility and can adopt innovations faster. Our empirical findings not only confirm the dependency of growth rate on firm size, rejecting Gibrat’s Law of Proportionate Effect, but highlight the relevance of incremental innovation as an inflection point of firm growth, creating a competitive opportunity window for small firms.