The effects of importing activities on technological and non-technological innovation: Evidence from Chilean firms

Abstract

Purpose: We analyzed the effects of importing activities on both technological and non-technological innovation in Chile. We contribute to the literature by hypothesizing and testing the idea that importing activities can foster the introduction of product, process, marketing, and organizational innovations in emerging market firms.Design/methodology/approach: We used a combination of two economic surveys that included 1,347 Chilean companies. To test our hypotheses, we applied a variant of the CDM model (Crépon et al., 1998) accounting for technological and non-technological innovation outputs. Specifically, four alternative innovation output indicators were used to measure the introduction of product, process, marketing, and organizational innovations.Findings: The results revealed that importing activities had positive effects on technological and non- technological innovation. Importers showed a significant advantage in the introduction of product, marketing, and organizational innovations. Firms that both import and export (i.e., two-way traders) had an even greater advantage in the introduction of new or significantly improved products.Originality/value: We demonstrated a relationship between importing activities and both technological and non- technological innovation that is novel and relevant, particularly at a historical moment when COVID-19 poses huge economic challenges to emerging market firms. As trade disruptions caused by the pandemic have predisposed some governments to favor protectionist policies, we warn that erecting barriers against imports can hamper the innovative success of local businesses.