[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/nbs/wpaper/2020-01.html
   My bibliography  Save this paper

Learning Before and After the Global Crisis: Firm-level Innovation in Latin America

Author

Listed:
  • King Yoong Lim
  • Diego Morris
Abstract
Economic shocks of the kind we recently witnessed with the 2008 global financial and economic crisis do not come around very often but when they do, their effect can be catastrophic, not the least because of their impact on businesses. Existing theories of how firms react to crises such as these are ambiguous and very little empirical evidence exist, particularly for the developing world. As such, our main contribution to the literature is to shed light on these issues, articulating a theoretical framework and testing it using three waves of cross-country innovation identifying survey implemented by the World Bank in Latin American economies. The three waves coincide with a timespan that covers before, during, and after the global crises. Our results provide strong support that firms alter their practices and witness different profit outcomes before and after a downturn depending on innovation decisions. In fact, we find evidence that indicates that the profitability gains from new products for firms may be higher during downturns.

Suggested Citation

  • King Yoong Lim & Diego Morris, 2020. "Learning Before and After the Global Crisis: Firm-level Innovation in Latin America," NBS Discussion Papers in Economics 2020/01, Economics, Nottingham Business School, Nottingham Trent University.
    • Handle: RePEc:nbs:wpaper:2020/01
    as

    Download full text from publisher

    File URL: http://www.ntu.ac.uk/__data/assets/pdf_file/0034/944494/NBS_2020_01_full.pdf
    File Function: First version, 2020
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Paunov, Caroline, 2016. "Corruption's asymmetric impacts on firm innovation," Journal of Development Economics, Elsevier, vol. 118(C), pages 216-231.
    2. Archibugi, Daniele & Filippetti, Andrea & Frenz, Marion, 2013. "Economic crisis and innovation: Is destruction prevailing over accumulation?," Research Policy, Elsevier, vol. 42(2), pages 303-314.
    3. Oscar Pavlov & Mark Weder, 2017. "Product Scope and Endogenous Fluctuations," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 175-191, March.
    4. Pereira, Mariano & Tacsir, Ezequiel, 2019. "Who has been driving the creation of industrial employment in Argentina? An analysis of the role of innovation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    5. Gustavo Crespi & Elena Arias-Ortiz & Ezequiel Tacsir & Fernando Vargas & Pluvia Zuñiga, 2014. "Innovation for economic performance: the case of Latin American firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 31-50, June.
    6. Andrew B. Bernard & Stephen J. Redding & Peter K. Schott, 2010. "Multiple-Product Firms and Product Switching," American Economic Review, American Economic Association, vol. 100(1), pages 70-97, March.
    7. Keith Blackburn & Dimitrios Varvarigos, 2008. "Human capital accumulation and output growth in a stochastic environment," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 36(3), pages 435-452, September.
    8. Bielschowsky, Ricardo, 2008. "Sixty years of ECLAC: structuralism and neo-structuralism," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
    9. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    10. Teresa C Fort & John Haltiwanger & Ron S Jarmin & Javier Miranda, 2013. "How Firms Respond to Business Cycles: The Role of Firm Age and Firm Size," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 520-559, August.
    11. Rita Almeida & Ana Margarida Fernandes, 2008. "Openness and Technological Innovations in Developing Countries: Evidence from Firm-Level Surveys," Journal of Development Studies, Taylor & Francis Journals, vol. 44(5), pages 701-727.
    12. Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation and Productivity: Evidence from Six Latin American Countries," World Development, Elsevier, vol. 40(2), pages 273-290.
    13. Blackburn, Keith & Galindev, Ragchaasuren, 2003. "Growth, volatility and learning," Economics Letters, Elsevier, vol. 79(3), pages 417-421, June.
    14. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    15. Oikawa, Koki, 2010. "Uncertainty-driven growth," Journal of Economic Dynamics and Control, Elsevier, vol. 34(5), pages 897-912, May.
    16. Silvestri, Daniela & Riccaboni, Massimo & Della Malva, Antonio, 2018. "Sailing in all winds: Technological search over the business cycle," Research Policy, Elsevier, vol. 47(10), pages 1933-1944.
    17. Irene Brambilla & Galina Hale & Cheryl Long, 2009. "Foreign Direct Investment and the Incentives to Innovate and Imitate," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 835-861, December.
    18. Roberto Alvarez & José De Gregorio, 2014. "Understanding Differences in Growth Performance in Latin America and Developing Countries between the Asian and the Global Financial Crises," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 62(4), pages 494-525, November.
    19. Molina-Domene, María A. & Pietrobelli, Carlo, 2012. "Drivers of technological capabilities in developing countries: An econometric analysis of Argentina, Brazil and Chile," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 504-515.
    20. Aghion, Philippe & Saint-Paul, Gilles, 1998. "VIRTUES OF BAD TIMES Interaction Between Productivity Growth and Economic Fluctuations," Macroeconomic Dynamics, Cambridge University Press, vol. 2(3), pages 322-344, September.
    21. Rachel Griffith & Gareth Macartney, 2014. "Employment Protection Legislation, Multinational Firms, and Innovation," The Review of Economics and Statistics, MIT Press, vol. 96(1), pages 135-150, March.
    22. Beck, Thorsten & Demirgüç-Kunt, Asli & Maksimovic, Vojislav, 2008. "Financing patterns around the world: Are small firms different?," Journal of Financial Economics, Elsevier, vol. 89(3), pages 467-487, September.
    23. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    24. Pietrobelli, Carlo & Puppato, Fernanda, 2016. "Technology foresight and industrial strategy," Technological Forecasting and Social Change, Elsevier, vol. 110(C), pages 117-125.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Pengfei Jia & King Yoong Lim, 2021. "The stabilization role of police spending in a neo‐Keynesian economy with credit market imperfections," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(1), pages 103-125, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Lim, King Yoong & Morris, Diego, 2023. "Business optimism and the innovation-profitability nexus: Introducing the COVID-19 adaptable capacity framework," Research Policy, Elsevier, vol. 52(1).
    2. Morris, Diego M., 2018. "Innovation and productivity among heterogeneous firms," Research Policy, Elsevier, vol. 47(10), pages 1918-1932.
    3. Max Nathan & Anna Rosso, 2017. "Innovative events," Development Working Papers 429, Centro Studi Luca d'Agliano, University of Milano, revised 08 Apr 2019.
    4. Messaoud Zouikri & Mounir Amdaoud, 2018. "Compétences externes et innovation: le cas des firmes de l'industrie manufacturière algérienne," EconomiX Working Papers 2018-37, University of Paris Nanterre, EconomiX.
    5. Edeh, Jude N. & Acedo, Francisco J., 2021. "External supports, innovation efforts and productivity: Estimation of a CDM model for small firms in developing countries," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    6. Teimuraz Gogokhia & George Berulava, 2021. "Business environment reforms, innovation and firm productivity in transition economies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(2), pages 221-245, June.
    7. Ioannis Giotopoulos & Alexander S. Kritikos & Aggelos Tsakanikas, 2023. "A lasting crisis affects R&D decisions of smaller firms: the Greek experience," The Journal of Technology Transfer, Springer, vol. 48(4), pages 1161-1175, August.
    8. Lee, Cassey, 2011. "Trade, productivity, and innovation: Firm-level evidence from Malaysian manufacturing," Journal of Asian Economics, Elsevier, vol. 22(4), pages 284-294, August.
    9. Barbara Annicchiarico & Alessandra Pelloni, 2014. "Productivity growth and volatility: how important are wage and price rigidities?," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 306-324, January.
    10. Wadho, Waqar & Chaudhry, Azam, 2020. "Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan," GLO Discussion Paper Series 466, Global Labor Organization (GLO).
    11. Eric J. Bartelsman & Martin Falk & Eva Hagsten & Michael Polder, 2019. "Productivity, technological innovations and broadband connectivity: firm-level evidence for ten European countries," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 9(1), pages 25-48, March.
    12. Fagerberg, Jan & Srholec, Martin & Verspagen, Bart, 2010. "Innovation and Economic Development," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 833-872, Elsevier.
    13. Acosta, Manuel & Coronado, Daniel & Romero, Carlos, 2015. "Linking public support, R&D, innovation and productivity: New evidence from the Spanish food industry," Food Policy, Elsevier, vol. 57(C), pages 50-61.
    14. Preeya Mohan & Eric Strobl & Patrick Watson, 2017. "In-Firm Training, Innovation and Productivity: The Case of Caribbean Small Island Developing States," IDB Publications (Working Papers) 98136, Inter-American Development Bank.
    15. Fedyunina, Anna & Radosevic, Slavo, 2022. "The relationship between R&D, innovation and productivity in emerging economies: CDM model and alternatives," Economic Systems, Elsevier, vol. 46(3).
    16. Wadho, Waqar & Chaudhry, Azam, 2022. "Innovation strategies and productivity growth in developing countries: Firm-level evidence from Pakistani manufacturers," Journal of Asian Economics, Elsevier, vol. 81(C).
    17. Bartz, Wiebke & Mohnen, Pierre & Schweiger, Helena, 2016. "The role of innovation and management practices in determining firm productivity in developing economies," MERIT Working Papers 2016-034, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Gustavo Crespi & Elena Arias-Ortiz & Ezequiel Tacsir & Fernando Vargas & Pluvia Zuñiga, 2014. "Innovation for economic performance: the case of Latin American firms," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 4(1), pages 31-50, June.
    19. Regis, Paulo José & Desmarchelier, Benoît, 2018. "Innovation and Productivity in the service sector of emerging and developing countries," RIEI Working Papers 2018-01, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    20. Adel Ben Khalifa, 2023. "Impact of research and development (R&D) and information, and communication technology (ICT) on innovation and productivity evidence from Tunisian manufacturing firms," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 341-361, April.

    More about this item

    Keywords

    Economic crisis; Innovation; Latin America; Productivity.;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nbs:wpaper:2020/01. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: King Lim (email available below). General contact details of provider: http://www.ntu.ac.uk/nbs .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.