Radical innovation, incremental innovation and training: Analysis of complementarity

•The radical innovation has a positive and significant effect on the productivity.•The acquisition of technology embodied has a negative and significant effect on the productivity.•The training has a positive and significant influence on the productivity of firms.•The larger enterprises and enterprises that export more achieve higher levels of productivity.•There is no complementarity/substitutability between radical innovation, incremental innovation and training.

This paper analyzes the connection between labour productivity and variables such as radical innovation, incremental innovation, production technology embodied in new machinery and equipment, utilization of productive capacity and training. Furthermore, we test the existence of complementarity between radical innovation, incremental innovation and training. The data used are from Spanish manufacturing and service companies and have been collected by the Business Environment and Enterprise Performance Survey (BEEPS). The results indicate that radical innovation and training have a positive and significant impact on labour productivity. The influence of production technology embodied is also significant but negative. We did not find evidence of complementarity or substitutability between the variables analyzed.