Innovation Behavior of Salvadoran Food & Beverage Industry Firms

Abstract

This paper presents a quantitative analysis of the external and internal determinants that affect the innovation dynamics of a low-tech sector in a less developed economy; the food & beverage (F&B) industry in El Salvador. The empirical framework relies on a multivariate probit analysis applied to data from El Salvador’s First National Innovation Survey 2013. The results show that R&D activities, use of industrial protection by F&B industry firms as well as relationships between firms and knowledge agents are useful for technological innovations while the qualifications of firms’ workforce and the relationships between firms and value chain agents prove useful for non-technological innovations. In addition, firms can take advantage of their size and location in the department of San Salvador to promote product innovation, whereas firms’ maturity is seen to be a disadvantage. Based on the results to emerge, the role that public science, technology and innovation (STI) policies as well as STI business strategies can play in the Salvadoran agri-food industry innovation system is seen to be huge.