How Effective are Innovation Support Programs to Stimulate Innovation? Evidence from Paraguay

Available from: 
April 2018
Paper author(s): 
Diego Aboal
Gustavo Rojas
Belén Servín
Paz Queraltó
Topic: 
Microeconomics - Competition - Productivity

In this paper we evaluate the impact of two programs to support innovation in micro, small and medium enterprises in Paraguay. This article has two contributions to literature. First, the evidence on the impact of this type of programs in developing countries is still scarce. Second, we evaluate the impacts on some variables that have been largely overlooked in the literature, such as innovation activities other than R&D. The evaluation finds positive and significant effects on the probability of carrying out various innovation activities, on the probability of achieving different types of innovation and on the incorporation of technical personnel to the firms. A negative effect on R&D was found, which might be showing a displacement effect of this innovation activity by others. The most robust results are those related to the impact of the program on process and product innovation. The impacts on innovation activities and employment are less robust to alternative specifications and samples.

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Research section: 
Working Papers