Does novelty and the type of innovation affect the performance of companies? A case study for Ecuador

Abstract

Since innovation is a productivity engine that leads to economic growth, the case of a developing country like Ecuador is studied. The objective of this article is to measure the causal effect of innovation on the productivity of companies, distinguishing the type of innovation, that is, in products, processes, organization and marketing. For this, an endogenous switching model is estimated using the Survey of Science, Technology and Innovation Activities (STIA, 2011, 2014). The results indicate that the productivity loss is greater for innovative companies if they stop innovating than the productivity gain for non-innovative companies if they engage in innovation. The difference between productivity gains and losses depends on the type of innovation.