Statistical Analysis of Latecomers’ Innovations in Times of Crisis

This chapter examines the role of different types of innovation in helping latecomer firms survive and succeed during adverse economic conditions in developing countries, using Argentina’s 1998–2001 economic crisis as a case study. The study draws on latecomer firm theory and firms’ differences in evolutionary theory to investigate the competitive strategies of latecomer firms, focusing not only on product and process innovations but also on nontechnical areas such as organizational innovations. The empirical analysis is based on data from the Second Innovation Survey in Argentina, covering a sample of 1688 manufacturing firms. The results show that technological innovation, particularly the introduction of product and process innovations, positively impacted firm performance during the economic crisis. Process innovations had a greater impact on total sales and labor productivity compared to product innovations, suggesting that latecomer firms prioritized the sale of cheaper goods through process innovations. The role of non-technological innovations, such as marketing and organizational innovations, had mixed results. Organizational innovations, when measured as inputs or efforts toward organizational change, had a positive impact on firm performance. This suggests that organizational capabilities, such as new business strategies and quality management systems, are important during times of crisis. The study also highlights the preference for flexibility among firms operating in crisis-ridden countries like Argentina. Organizational innovations were found to have a stronger impact on total sales than on labor productivity, indicating their relevance in improving corporate flexibility and customer-oriented structures. Overall, the findings suggest that latecomer firms in developing countries can benefit from both technological and non-technological innovations to navigate and succeed during economic crises. The chapter concludes by emphasizing the need for further research and case studies to enhance our understanding of the relationship between innovation and firm performance in developing country contexts.