Obstacles to Innovation and Firm Size: A Quantitative Study for Argentina. Competitiveness, Technology, and Innovation Division, Inter-American Development Bank

ARZA, VALERIA; LÓPEZ, EMANUEL

IDB Technical Note

Inter-american Development Bank

Año: 2018 p. 1 - 53

1027-2550

This study contributes to our understanding of how barriers to innovationaffect firms of different size. We review the literature on obstacles toinnovation. We found that there is a gap regarding the systematicappraisal of firms? size as an important characteristic mediating the effectthat obstacles have on innovative investment and performance. Therelevance of this topic lies in the important role that small and mediumenterprises (SMEs) play in the economic structure. In developingcountries, in addition, SMEs lag further behind average productivity, sothe need for innovation is greater. We use Argentinean survey data foryears 2010?12. We use different econometric techniques suitable for ourdata. We found that obstacles have a negative impact on innovationinvestment and performance. In terms of size, SMEs? investment isparticularly affected. When the analysis is done by type of obstacles, wefound that cost and market obstacles are important barriers for pursuinginnovation activities. Knowledge obstacles seem to hamper the intensityof investment in innovation. Cost, market, and knowledge obstacles alllimit performance in innovation. In turn, while cost obstacles are generallymore deterrent for SMEs, we could not find systematic size differenceregarding the effect of other obstacles.