[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/eee/respol/v52y2023i7s0048733323000987.html
   My bibliography  Save this article

Financial and knowledge barriers to innovation: Complementary and substitution effects on innovative effort

Author

Listed:
  • Jaureguy, Micaela Vidal
  • Bianchi, Carlos
  • Blanchard, Pablo
Abstract
Innovation studies have thoroughly analysed how firms' perception of barriers affects their innovative behaviour. We contribute to this line of research by analysing complementary and substitution effects between financial barriers, internal knowledge barriers and external knowledge barriers on firms' innovative effort. Using a panel data set of Uruguayan firms between 2006 and 2015, we add to empirical studies on this topic by estimating both unconditional and conditional complementary and substitution effects between these innovation barriers. We apply an econometric two-step specification that includes an estimation of instrumental variables, which allows us to control for endogeneity biases in the supermodularity and submodularity tests. We find significant evidence that external and internal knowledge barriers reinforce each other's effects (complementary effects), conditional on the absence of financial barriers. We also find that financial and internal knowledge barriers mitigate each other's effects (substitution effects) conditional on the firm's perception of external knowledge barriers. Additionally, we find substitution effects between financial and external knowledge barriers, conditional on the firm's perception of internal knowledge barriers. We discuss these results against the backdrop of Uruguayan innovation policies during the period studied, and stress the necessary articulation between instruments that will help strengthen firms' innovation management to recognize and manage innovation barriers.

Suggested Citation

  • Jaureguy, Micaela Vidal & Bianchi, Carlos & Blanchard, Pablo, 2023. "Financial and knowledge barriers to innovation: Complementary and substitution effects on innovative effort," Research Policy, Elsevier, vol. 52(7).
    • Handle: RePEc:eee:respol:v:52:y:2023:i:7:s0048733323000987
    DOI: 10.1016/j.respol.2023.104814
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0048733323000987
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.respol.2023.104814?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ballot, Gérard & Fakhfakh, Fathi & Galia, Fabrice & Salter, Ammon, 2015. "The fateful triangle: Complementarities in performance between product, process and organizational innovation in France and the UK," Research Policy, Elsevier, vol. 44(1), pages 217-232.
    2. Alejandro Bello-Pintado & Carlos Bianchi & Pablo Blanchard, 2022. "Trade-offs between external knowledge sources for firm innovation in a developing country [A comparative analysis of the innovation performance between foreign subsidiaries and owned domestic firms," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 31(5), pages 1307-1327.
    3. Hölzl, Werner & Janger, Jürgen, 2014. "Distance to the frontier and the perception of innovation barriers across European countries," Research Policy, Elsevier, vol. 43(4), pages 707-725.
    4. Zahler, Andrés & Goya, Daniel & Caamaño, Matías, 2022. "The primacy of demand and financial obstacles in hindering innovation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    5. Pierre Blanchard & Jean-Pierre Huiban & Antonio Musolesi & Patrick Sevestre, 2013. "Where there is a will, there is a way? Assessing the impact of obstacles to innovation," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 22(3), pages 679-710, June.
    6. Roberto Alvarez & Gustavo A. Crespi, 2015. "Heterogeneous effects of financial constraints on innovation: Evidence from Chile," Science and Public Policy, Oxford University Press, vol. 42(5), pages 711-724.
    7. Fernandez, Viviana, 2017. "The finance of innovation in Latin America," International Review of Financial Analysis, Elsevier, vol. 53(C), pages 37-47.
    8. Keld Laursen, 2002. "The Importance of Sectoral Differences in the Application of Complementary HRM Practices for Innovation Performance," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 9(1), pages 139-156.
    9. Rodrigo Arocena & Judith Sutz, 2000. "Looking At National Systems Of Innovation From The South," Industry and Innovation, Taylor & Francis Journals, vol. 7(1), pages 55-75.
    10. S. Trevis Certo & John R. Busenbark & Hyun‐soo Woo & Matthew Semadeni, 2016. "Sample selection bias and Heckman models in strategic management research," Strategic Management Journal, Wiley Blackwell, vol. 37(13), pages 2639-2657, December.
    11. Spyros Arvanitis & Boris Lokshin & Pierre Mohnen & Martin Woerter, 2015. "Impact of External Knowledge Acquisition Strategies on Innovation: A Comparative Study Based on Dutch and Swiss Panel Data," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 46(4), pages 359-382, June.
    12. Nelson, Richard R., 2008. "Bounded rationality, cognitive maps, and trial and error learning," Journal of Economic Behavior & Organization, Elsevier, vol. 67(1), pages 78-89, July.
    13. P. Mohnen & F. Palm & S. Loeff & A. Tiwari, 2008. "Financial Constraints and Other Obstacles: are they a Threat to Innovation Activity?," De Economist, Springer, vol. 156(2), pages 201-214, June.
    14. Pellegrino, Gabriele & Savona, Maria, 2017. "No money, no honey? Financial versus knowledge and demand constraints on innovation," Research Policy, Elsevier, vol. 46(2), pages 510-521.
    15. Mohnen, Pierre & Roller, Lars-Hendrik, 2005. "Complementarities in innovation policy," European Economic Review, Elsevier, vol. 49(6), pages 1431-1450, August.
    16. Giovanni Gavetti, 2005. "Cognition and Hierarchy: Rethinking the Microfoundations of Capabilities’ Development," Organization Science, INFORMS, vol. 16(6), pages 599-617, December.
    17. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-596, September.
    18. Frishammar, Johan & Richtnér, Anders & Brattström, Anna & Magnusson, Mats & Björk, Jennie, 2019. "Opportunities and challenges in the new innovation landscape: Implications for innovation auditing and innovation management," European Management Journal, Elsevier, vol. 37(2), pages 151-164.
    19. Susana Borrás & Charles Edquist, 2015. "Education, training and skills in innovation policy," Science and Public Policy, Oxford University Press, vol. 42(2), pages 215-227.
    20. Pablo D'Este & Simona Iammarino & Maria Savona & Nick von Tunzelmann, 2008. "What hampers innovation? Evidence from the UK CIS4," SPRU Working Paper Series 168, SPRU - Science Policy Research Unit, University of Sussex Business School.
    21. Arza, Valeria & López, Emanuel, 2021. "Obstacles affecting innovation in small and medium enterprises: Quantitative analysis of the Argentinean manufacturing sector," Research Policy, Elsevier, vol. 50(9).
    22. Daniel Bukstein & Elisa Hernández & Ximena Usher, 2018. "Impacto de los instrumentos de promoción de la innovación orientada al sector productivo: El caso de ANII en Uruguay," Estudios de Economia, University of Chile, Department of Economics, vol. 45(2), pages 271-299, December.
    23. Kodde, David A & Palm, Franz C, 1986. "Wald Criteria for Jointly Testing Equality and Inequality Restriction s," Econometrica, Econometric Society, vol. 54(5), pages 1243-1248, September.
    24. Roper, Stephen & Hewitt-Dundas, Nola, 2008. "Innovation persistence: Survey and case-study evidence," Research Policy, Elsevier, vol. 37(1), pages 149-162, February.
    25. D’Este, Pablo & Iammarino, Simona & Savona, Maria & von Tunzelmann, Nick, 2012. "What hampers innovation? Revealed barriers versus deterring barriers," Research Policy, Elsevier, vol. 41(2), pages 482-488.
    26. Manuel Guisado-González & Jennifer González-Blanco & José Luís Coca-Pérez & Manuel Guisado-Tato, 2018. "Assessing the relationship between R&D subsidy, R&D cooperation and absorptive capacity: an investigation on the manufacturing Spanish case," The Journal of Technology Transfer, Springer, vol. 43(6), pages 1647-1666, December.
    27. Resende, Marcelo & Strube, Eduardo & Zeidan, Rodrigo, 2014. "Complementarity of innovation policies in Brazilian industry: An econometric study," International Journal of Production Economics, Elsevier, vol. 158(C), pages 9-17.
    28. Aboal, Diego & Garda, Paula, 2015. "Does public financial support stimulate innovation and productivity? An impact evaluation," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), April.
    29. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    30. Frederique Savignac, 2008. "Impact Of Financial Constraints On Innovation: What Can Be Learned From A Direct Measure?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 17(6), pages 553-569.
    31. Baldwin, John & Lin, Zhengxi, 2002. "Impediments to advanced technology adoption for Canadian manufacturers," Research Policy, Elsevier, vol. 31(1), pages 1-18, January.
    32. Galia, Fabrice & Legros, Diego, 2004. "Complementarities between obstacles to innovation: evidence from France," Research Policy, Elsevier, vol. 33(8), pages 1185-1199, October.
    33. Davide Antonioli & Alberto Marzucchi & Maria Savona, 2017. "Pain shared, pain halved? Cooperation as a coping strategy for innovation barriers," The Journal of Technology Transfer, Springer, vol. 42(4), pages 841-864, August.
    34. Alex Coad & Gabriele Pellegrino & Maria Savona, 2016. "Barriers to innovation and firm productivity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 25(3), pages 321-334, April.
    35. Fernando Santiago & Claudia De Fuentes & Gabriela Dutrénit & Natalia Gras, 2017. "What hinders innovation performance of services and manufacturing firms in Mexico?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 26(3), pages 247-268, April.
    36. Milgrom, Paul & Roberts, John, 1995. "Complementarities and fit strategy, structure, and organizational change in manufacturing," Journal of Accounting and Economics, Elsevier, vol. 19(2-3), pages 179-208, April.
    37. Grimpe, Christoph & Sofka, Wolfgang, 2016. "Complementarities in the search for innovation—Managing markets and relationships," Research Policy, Elsevier, vol. 45(10), pages 2036-2053.
    38. Milgrom, Paul & Roberts, John, 1990. "The Economics of Modern Manufacturing: Technology, Strategy, and Organization," American Economic Review, American Economic Association, vol. 80(3), pages 511-528, June.
    39. Claudia Fuentes & Fernando Santiago & Serdal Temel, 2020. "Perception of innovation barriers by successful and unsuccessful innovators in emerging economies," The Journal of Technology Transfer, Springer, vol. 45(4), pages 1283-1307, August.
    40. Leandro Alves Silva & Sara Gonçalves Antunes de Souza & Hérica Morais Righi & Wellington Marcelo Silva da Cruz, 2009. "University—industry interactions in an immature system of innovation: Evidence from Minas Gerais, Brazil," Science and Public Policy, Oxford University Press, vol. 36(5), pages 373-386, June.
    41. Felipe Berrutti & Carlos Bianchi, 2020. "Effects of public funding on firm innovation: transforming or reinforcing a weak innovation pattern?," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 29(5), pages 522-539, July.
    42. Donald M. Topkis, 1978. "Minimizing a Submodular Function on a Lattice," Operations Research, INFORMS, vol. 26(2), pages 305-321, April.
    43. Tommy Clausen, 2008. "Search Pathways to Innovation," Working Papers on Innovation Studies 20080311, Centre for Technology, Innovation and Culture, University of Oslo.
    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. Castaneda, Monica & Herrera, Milton M. & Méndez-Morales, Alberto, 2023. "A simulation-based approach for assessing the innovation barriers in the manufacturing firms," Technology in Society, Elsevier, vol. 75(C).

    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. Zahler, Andrés & Goya, Daniel & Caamaño, Matías, 2022. "The primacy of demand and financial obstacles in hindering innovation," Technological Forecasting and Social Change, Elsevier, vol. 174(C).
    2. Davide Antonioli & Alberto Marzucchi & Maria Savona, 2017. "Pain shared, pain halved? Cooperation as a coping strategy for innovation barriers," The Journal of Technology Transfer, Springer, vol. 42(4), pages 841-864, August.
    3. Gabriele Pellegrino, 2015. "Barriers to innovation: can firm age help lower them?," Working Papers 2015/3, Institut d'Economia de Barcelona (IEB).
    4. Ortiz, Rodrigo & Fernandez, Viviana, 2022. "Business perception of obstacles to innovate: Evidence from Chile with pseudo-panel data analysis," Research in International Business and Finance, Elsevier, vol. 59(C).
    5. Sandro Montresor & Antonio Vezzani, 2019. "Financial constraints and intangible investments. Do innovative and non-innovative firms differ?," JRC Working Papers on Corporate R&D and Innovation 2019-07, Joint Research Centre.
    6. Pinget, Amandine, 2016. "Spécificités des déterminants des innovations environnementales : une approche appliquée aux PME [Specificities of determinants for environmental innovation : an approach applied to SMEs]," MPRA Paper 80108, University Library of Munich, Germany.
    7. Leoncini, Riccardo, 2016. "Learning-by-failing. An empirical exercise on CIS data," Research Policy, Elsevier, vol. 45(2), pages 376-386.
    8. Amandine Pinget & Rachel Bocquet & Caroline Mothe, 2015. "Barriers to Environmental Innovation in SMEs: Empirical Evidence from French Firms," Post-Print hal-01300837, HAL.
    9. Gabriele Pellegrino, 2018. "Barriers to innovation in young and mature firms," Journal of Evolutionary Economics, Springer, vol. 28(1), pages 181-206, January.
    10. Roberto Alvarez & Miguel A. Gonzalez, 2023. "Obstacles to Green Innovation: Evidence from Chilean Firms," Working Papers wp550, University of Chile, Department of Economics.
    11. Pavla Matulova & Petra Maresova & Mohammad Ali Tareq & Kamil Kuča, 2018. "Open Innovation Session as a Tool Supporting Innovativeness in Strategies for High-Tech Companies in the Czech Republic," Economies, MDPI, vol. 6(4), pages 1-13, December.
    12. Zahler, Andrés & Goya, Daniel & Caamaño, Matías, 2018. "The Role of Obstacles to Innovation on Innovative Activities: An Empirical Analysis," IDB Publications (Working Papers) 73, Inter-American Development Bank.
    13. Perez-Alaniz, Mauricio & Lenihan, Helena & Doran, Justin & Rammer, Christian, 2024. "Subsidising innovation outside or within firms' existing knowledge base: Which is best for radical innovation?," ZEW Discussion Papers 24-007, ZEW - Leibniz Centre for European Economic Research.
    14. Jose García‐Quevedo & Elisenda Jové‐Llopis & Ester Martínez‐Ros, 2020. "Barriers to the circular economy in European small and medium‐sized firms," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2450-2464, September.
    15. Dragana Radicic, 2021. "Financial and Non-Financial Barriers to Innovation and the Degree of Radicalness," Sustainability, MDPI, vol. 13(4), pages 1-15, February.
    16. Hölzl, Werner & Janger, Jürgen, 2014. "Distance to the frontier and the perception of innovation barriers across European countries," Research Policy, Elsevier, vol. 43(4), pages 707-725.
    17. Pellegrino, Gabriele & Savona, Maria, 2013. "Is money all? Financing versus knowledge and demand constraints to innovation," MERIT Working Papers 2013-029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    18. Vicente Salas-Fumás & Javier Ortiz, 2019. "Innovations’ Success and Failure in the Business Cycle," Sustainability, MDPI, vol. 11(15), pages 1-22, August.
    19. García-Quevedo, José & Segarra-Blasco, Agustí & Teruel, Mercedes, 2018. "Financial constraints and the failure of innovation projects," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 127-140.
    20. Pellegrino, Gabriele & Savona, Maria, 2013. "Is money all? Financing versus knowledge and demand constraints to innovation," MERIT Working Papers 029, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).

    More about this item

    Keywords

    Innovation barriers; Complementarity and substitution; Innovation policy; Latin America;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

    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:eee:respol:v:52:y:2023:i:7:s0048733323000987. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/respol .

    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.