Drivers of Technological Capabilities in Developing Countries: An Econometric Analysis of Argentina, Brazil and Chile
Molina, María Alejandra
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This paper introduces the concept of technological knowledge and innovation as key concepts not shared equally among firms. The Evolutionary approaches to the issues of technology in developing countries have assigned a central role to the need to create indigenous technological efforts in mastering new technologies, adapting them to local conditions, improving and exploiting them. Efficiency in setting up, operating, diversifying, and expanding an industrial operation requires specific knowledge and skills in technology, that may be called "capabilities" of the firm. Technological Capabilities (TCs) are then examined here on the perspective of Lall's (1992) definition as a "complex array of skills, technological knowledge, organizational structures, required to operate a technology efficiently and accomplish any process of technological change". TCs, then, embody the resources required to manage and actualize the generation of technical change. The purpose of this work is to propose a methodology for obtaining econometrical estimates of TCs in Argentina, Brazil and Chile. Based on the World Bank's Investment Climate database, as a result of firms' surveys made in each of the mentioned countries, the study covers firms from different industrial sectors. This work applies Wignaraja's Technology Index (TI) in an attempt to provide a preliminary analysis for measuring Technological Capabilities (TCs) and their determinants, and to identify the reciprocal causality relation between them and firms' economic performance. Supported by TI, the study proceeds with the econometric analysis developed through Simultaneous Equations. Endogeneity tests are also run to test the robustness of TI. Although this study does not explicitly examine TCs over time it offers a glance of the relationship between TCs, export share and other micro level factors in a certain moment in Argentina, Brazil and Chile.