The Impact of Cooperation on Business Innovation in Developing Countries: Evidence from Chile in Latin America

Abstract

There is abundant empirical evidence supporting the relationship between cooperation and innovative entrepreneurial activity, but the conversation continues to be limited to the context of developing countries. This study contributes to the academic debate on this topic with an empirical evaluation of the effect of cooperation networks on innovation, using Chile in Latin America as a case study. Furthermore, while previous studies mainly refer to technological innovations in a particular industrial sector, in this paper we will build an innovation measurement system that incorporates both technological and non-technological activities among diverse industrial sectors. Upon applying cross-sectional data from a national survey on innovation in a developing firm from two different years to a zero-inflated negative binomial regression, we found that a business that reports on cooperation conducts more innovative activities per year compared to one that does not. The type of agent that a business cooperates with is also relevant in this context; other businesses, clients, and consultants showed stronger and more stable results than other types of agents. This evidence is relevant as it presents new information about the importance of the type of agent that a business cooperates with in the context of developing countries.