Innovation and productivity in developing countries: A study of Argentine manufacturing firms’ behavior (1992–2001)

Following the methodology employed in studies for industrialized countries and using panel data from innovation surveys in Argentina with information for 1992–2001, this paper contributes to the nascent literature that analyzes the determinants of innovative inputs and outputs and their impacts on manufacturing firms’ productivity in developing countries. The econometric results show that in house R&D and technology acquisition expenditures have positive payoffs in terms of enhanced probability of introducing new products and/or processes to the market. In turn, innovators attain higher productivity levels than non-innovators. The results also show that large firms have a higher probability of engaging in innovation activities and of becoming innovators.