Innovation and performance in Peruvian manufacturing firms: does R&D play a role?

Abstract

Purpose: This paper aims to study whether Peruvian manufacturing firms that implement innovation have positive performance and whether R&D activities moderate these relationships. Design/methodology/approach: Using a data set of Peruvian manufacturing firms from the 2018 National Survey of Innovation, a LOGIT model analysis was applied to 774 companies. In addition, the authors fitted different models into subsamples to explore the moderating effects of R&D on manufacturing firms. Finally, the regression models were computed using R software. Findings: The results indicate that product, service and marketing innovation are associated positively with an increase in market share, while process and organizational innovations are associated positively with productivity. Moreover, companies with R&D are more productivity-oriented than companies without R&D. Research limitations/implications: This study contributes to the literature on innovation management by supporting the assumption that innovation results in increased productivity and expands market demand. In addition, findings highlight that R&D is essential for boosting firms’ productivity. Practical implications: Managers should consider an appropriate combination of the innovation portfolio and R&D investments to make progress and increase performance in the company. In addition, policymakers should consider that investments to promote the development of R&D activities in manufacturing companies will likely lead to médium- or long-term returns. Social implications: The correct use of indicators to measure these relationships could help the policymaker to design and measure policy instruments more efficiently. Originality/value: These results provide a deeper understanding of how the effects of innovations implemented by manufacturing firms, especially service and process innovation, improve their performance.