The dynamic links between product and process innovations and productivity for Colombian manufacturing

Purpose This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between these strategies, for Colombia. The authors first explore whether ex ante more productive firms are those that intro...

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Autores: Sanchis Llopis, Juan Alberto, Máñez Castillejo, Juan Antonio, Gómez Sánchez, Andrés Mauricio
Tipo de recurso: artículo
Fecha de publicación:2024
País:España
Institución:Universitat de València
Repositorio:RODERIC. Repositorio Institucional de la Universitat de València
OAI Identifier:oai:dnet:roderic_____::de091fb0055c58fa6ed8548dd5a15452
Acceso en línea:https://hdl.handle.net/10550/110295
https://www.emerald.com/insight/content/doi/10.1108/aea-01-2023-0009/full/html
Access Level:acceso abierto
Palabra clave:product innovation
process innovation
self-selection
returns-to-innovation
dynamics
UNESCO::CIENCIAS ECONÓMICAS::Organización y dirección de empresas
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spelling The dynamic links between product and process innovations and productivity for Colombian manufacturingSanchis Llopis, Juan AlbertoMáñez Castillejo, Juan AntonioGómez Sánchez, Andrés Mauricioproduct innovationprocess innovationself-selectionreturns-to-innovationdynamicsUNESCO::CIENCIAS ECONÓMICAS::Organización y dirección de empresasPurpose This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between these strategies, for Colombia. The authors first explore whether ex ante more productive firms are those that introduce innovations (the self-selection hypothesis) and if the introduction of innovations boosts TFP growth (the returns-to-innovation hypothesis). Second, the authors study the firm’s joint dynamic decision to implement process and/or product innovations. The authors use Colombian manufacturing data from the Annual Manufacturing and the Technological Development and Innovation Surveys. Design/methodology/approach This study uses a four-stage procedure. First, the authors estimate TFP using a modified version of Olley and Pakes (1996) and Levinsohn and Petrin (2003), proposed by De Loecker (2010), that implements an endogenous Markov process where past firm innovations are endogenized. This TFP would be estimated by GMM, Wooldridge (2009). Second, the authors use multivariate discrete choice models to test the self-selection hypothesis. Third, the authors explore, using multi-value treatment evaluation techniques, the life span of the impact of innovations on productivity growth (returns to innovation hypothesis). Fourth, the authors analyse the joint likelihood of implementing process and product innovations using dynamic panel data bivariate probit models. Findings The investigation reveals that the self-selection effect is notably more pronounced in the adoption of process innovations only, as opposed to the adoption of product innovations only or the simultaneous adoption of both process and product innovations. Moreover, our results uncover distinct temporal patterns concerning innovation returns. Specifically, process innovations yield immediate benefits, whereas implementing both product innovations only and jointly process and product innovations exhibit significant, albeit delayed, advantages. Finally, the analysis confirms the existence of dynamic interconnections between the adoption of process and product innovations. Originality/value The contribution of this work to the literature is manifold. First, the authors thoroughly investigate the relationship between the implementation of process and product innovations and productivity for Colombian manufacturing explicitly recognising that firms’ decisions of adopting product and process innovations are very likely interrelated. Therefore, the authors start exploring the self-selection and the returns to innovation hypotheses accounting for the fact that firms might implement process innovations only, product innovations only and both process and product innovations. In the analysis of the returns of innovation, the fact that firms may choose among a menu of three innovation strategies implies the use of evaluation methods for multi-value treatments. Second, the authors study the dynamic inter-linkages between the decisions to implement process and/or product innovations, that remains under studied, at least for emerging economies. Third, the estimation of TFP is performed using an endogenous Markov process, where past firms’ innovations are endogenized.Emerald202520252024journal articleVoRinfo:eu-repo/semantics/articleapplication/pdfhttps://hdl.handle.net/10550/110295https://www.emerald.com/insight/content/doi/10.1108/aea-01-2023-0009/full/htmlreponame:RODERIC. Repositorio Institucional de la Universitat de Valènciainstname:Universitat de ValènciaInglésAttribution 4.0 Internationalhttp://creativecommons.org/licenses/by/4.0/open accessinfo:eu-repo/semantics/openAccessoai:dnet:roderic_____::de091fb0055c58fa6ed8548dd5a154522025-07-15T12:44:01Z
dc.title.none.fl_str_mv The dynamic links between product and process innovations and productivity for Colombian manufacturing
title The dynamic links between product and process innovations and productivity for Colombian manufacturing
spellingShingle The dynamic links between product and process innovations and productivity for Colombian manufacturing
Sanchis Llopis, Juan Alberto
product innovation
process innovation
self-selection
returns-to-innovation
dynamics
UNESCO::CIENCIAS ECONÓMICAS::Organización y dirección de empresas
title_short The dynamic links between product and process innovations and productivity for Colombian manufacturing
title_full The dynamic links between product and process innovations and productivity for Colombian manufacturing
title_fullStr The dynamic links between product and process innovations and productivity for Colombian manufacturing
title_full_unstemmed The dynamic links between product and process innovations and productivity for Colombian manufacturing
title_sort The dynamic links between product and process innovations and productivity for Colombian manufacturing
dc.creator.none.fl_str_mv Sanchis Llopis, Juan Alberto
Máñez Castillejo, Juan Antonio
Gómez Sánchez, Andrés Mauricio
author Sanchis Llopis, Juan Alberto
author_facet Sanchis Llopis, Juan Alberto
Máñez Castillejo, Juan Antonio
Gómez Sánchez, Andrés Mauricio
author_role author
author2 Máñez Castillejo, Juan Antonio
Gómez Sánchez, Andrés Mauricio
author2_role author
author
dc.subject.none.fl_str_mv product innovation
process innovation
self-selection
returns-to-innovation
dynamics
UNESCO::CIENCIAS ECONÓMICAS::Organización y dirección de empresas
topic product innovation
process innovation
self-selection
returns-to-innovation
dynamics
UNESCO::CIENCIAS ECONÓMICAS::Organización y dirección de empresas
description Purpose This paper aims to examine the interrelation between two innovating strategies (product and process) on total factor productivity (TFP) growth and the dynamic linkages between these strategies, for Colombia. The authors first explore whether ex ante more productive firms are those that introduce innovations (the self-selection hypothesis) and if the introduction of innovations boosts TFP growth (the returns-to-innovation hypothesis). Second, the authors study the firm’s joint dynamic decision to implement process and/or product innovations. The authors use Colombian manufacturing data from the Annual Manufacturing and the Technological Development and Innovation Surveys. Design/methodology/approach This study uses a four-stage procedure. First, the authors estimate TFP using a modified version of Olley and Pakes (1996) and Levinsohn and Petrin (2003), proposed by De Loecker (2010), that implements an endogenous Markov process where past firm innovations are endogenized. This TFP would be estimated by GMM, Wooldridge (2009). Second, the authors use multivariate discrete choice models to test the self-selection hypothesis. Third, the authors explore, using multi-value treatment evaluation techniques, the life span of the impact of innovations on productivity growth (returns to innovation hypothesis). Fourth, the authors analyse the joint likelihood of implementing process and product innovations using dynamic panel data bivariate probit models. Findings The investigation reveals that the self-selection effect is notably more pronounced in the adoption of process innovations only, as opposed to the adoption of product innovations only or the simultaneous adoption of both process and product innovations. Moreover, our results uncover distinct temporal patterns concerning innovation returns. Specifically, process innovations yield immediate benefits, whereas implementing both product innovations only and jointly process and product innovations exhibit significant, albeit delayed, advantages. Finally, the analysis confirms the existence of dynamic interconnections between the adoption of process and product innovations. Originality/value The contribution of this work to the literature is manifold. First, the authors thoroughly investigate the relationship between the implementation of process and product innovations and productivity for Colombian manufacturing explicitly recognising that firms’ decisions of adopting product and process innovations are very likely interrelated. Therefore, the authors start exploring the self-selection and the returns to innovation hypotheses accounting for the fact that firms might implement process innovations only, product innovations only and both process and product innovations. In the analysis of the returns of innovation, the fact that firms may choose among a menu of three innovation strategies implies the use of evaluation methods for multi-value treatments. Second, the authors study the dynamic inter-linkages between the decisions to implement process and/or product innovations, that remains under studied, at least for emerging economies. Third, the estimation of TFP is performed using an endogenous Markov process, where past firms’ innovations are endogenized.
publishDate 2024
dc.date.none.fl_str_mv 2024
2025
2025
dc.type.none.fl_str_mv journal article
VoR
info:eu-repo/semantics/article
format article
dc.identifier.none.fl_str_mv https://hdl.handle.net/10550/110295
https://www.emerald.com/insight/content/doi/10.1108/aea-01-2023-0009/full/html
url https://hdl.handle.net/10550/110295
https://www.emerald.com/insight/content/doi/10.1108/aea-01-2023-0009/full/html
dc.language.none.fl_str_mv Inglés
language_invalid_str_mv Inglés
dc.rights.none.fl_str_mv Attribution 4.0 International
http://creativecommons.org/licenses/by/4.0/
open access
info:eu-repo/semantics/openAccess
rights_invalid_str_mv Attribution 4.0 International
http://creativecommons.org/licenses/by/4.0/
open access
eu_rights_str_mv openAccess
dc.format.none.fl_str_mv application/pdf
dc.publisher.none.fl_str_mv Emerald
publisher.none.fl_str_mv Emerald
dc.source.none.fl_str_mv reponame:RODERIC. Repositorio Institucional de la Universitat de València
instname:Universitat de València
instname_str Universitat de València
reponame_str RODERIC. Repositorio Institucional de la Universitat de València
collection RODERIC. Repositorio Institucional de la Universitat de València
repository.name.fl_str_mv
repository.mail.fl_str_mv
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