Innovation, R&D investment and productivity in Chile

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.