Synergies across Innovations Obstacles and the Role of Government Aid: Evidence from Chile

This research explores the effect of synergies across innovation obstacles on the inventive activity of Chilean manufacturers. Empirical analysis over the 2013-2018 period highlights the prevalence of two types of synergies: one comprising financial, network, knowledge and demand constraints and, another pairing regulatory obstacles to internal resistance to innovate. The presence of either set of obstacle synergy reduces the likelihood to innovate and weakens other innovation determinants such as R&D intensity, firm size, and the use of instruments for intellectual property protection. Firms accessing public support for innovation are found to respond differently from the rest. They tend to react to such constraints by tightening their scientific interaction with other private entities at the expense of links with public research institutions. Our results provide ample ground for policy making as they underscore avenues to jointly tackle innovation impediments while pointing out differences among various types of cooperative arrangements.