Human Capital and University-Industry Linkages' Role in Fostering Firm Innovation : An Empirical Study of Chile and Colombia
A firm's absorptive capacity, human capital and linkages with knowledge institutions have been shown to increase the firm's probability of innovating in OECD economies. Despite its importance for national- and firm-level competitiveness, few papers examine the impact of the same variables for firms innovation in Latin America. This paper investigates the link between firm innovation and its absorption capacity as proxied by the presence of a R&D department, the firm's human capital, and its interaction with research centers and universities. We analyze the case of Chilean and Colombian manufacturing firms using data from innovation surveys. A probit regression model is applied to identify the determinants of innovation activity. We find that collaboration with university and research institutions is associated with an increase in the probability of introducing a new product in Chilean and Colombian firms of 29 and 44 percent, respectively, and it can increase up to 58 percent in the case of Colombian firms interacting with research centers. Moreover, firms whose employees have a higher level of education, or whose managers/supervisors have a higher (perceived) level of knowledge, are more likely to innovate. Although the estimates could be affected by biases and suffer from shortcomings in data, the findings suggest that policies and incentives to increase firm-level human capital and industry-university linkages are important to increase innovation in Latin America.
| Summary: | A firm's absorptive capacity, human
capital and linkages with knowledge institutions have been
shown to increase the firm's probability of innovating
in OECD economies. Despite its importance for national- and
firm-level competitiveness, few papers examine the impact of
the same variables for firms innovation in Latin America.
This paper investigates the link between firm innovation and
its absorption capacity as proxied by the presence of a
R&D department, the firm's human capital, and its
interaction with research centers and universities. We
analyze the case of Chilean and Colombian manufacturing
firms using data from innovation surveys. A probit
regression model is applied to identify the determinants of
innovation activity. We find that collaboration with
university and research institutions is associated with an
increase in the probability of introducing a new product in
Chilean and Colombian firms of 29 and 44 percent,
respectively, and it can increase up to 58 percent in the
case of Colombian firms interacting with research centers.
Moreover, firms whose employees have a higher level of
education, or whose managers/supervisors have a higher
(perceived) level of knowledge, are more likely to innovate.
Although the estimates could be affected by biases and
suffer from shortcomings in data, the findings suggest that
policies and incentives to increase firm-level human capital
and industry-university linkages are important to increase
innovation in Latin America. |
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