Assessing the Impacts of Market Failures on Innovation Investment in Uruguay

This paper analyzes the effects of financial and nonfinancial obstacles to innovation on Uruguayan firms. We contribute to the literature by including the role of systemic and institutional factors affecting the different stages of the innovation process. The empirical analysis is based on four waves of national innovation surveys covering firms in the industry and services sector. In line with recent studies, we confine our analysis to the relevant sample of potentially innovative firms. Our results show that market, financial, knowledge, and context obstacles are the most important factors reducing innovation propensity and the amount invested in innovation activities. The effects are similar for firms in the industry and services sectors. We do not find evidence that institutional factors hamper innovation. Investment in equipment and investment in R&D and other intangible activities are affected differently by obstacles. On the other hand, innovation outcomes are affected mainly by financial and market-related barriers. We do not find evidence that obstacles to innovation have a significant impact on labor productivity.

Bibliographic Details

Main Author:	Inter-American Development Bank
Other Authors:	Daniel Bukstein
Format:	Technical Notes biblioteca
Language:	English
Published:	Inter-American Development Bank
Subjects:	Investment, Innovation, Labor Productivity, C23 - Panel Data Models • Spatio-temporal Models, O31 - Innovation and Invention: Processes and Incentives, O32 - Management of Technological Innovation and R&D, O33 - Technological Change: Choices and Consequences • Diffusion Processes, CDM model;financial and non-financial barriers to innovation;innovative firms;Uruguay,
Online Access:	http://dx.doi.org/10.18235/0001201 https://publications.iadb.org/en/assessing-impacts-market-failures-innovation-investment-uruguay
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