Public and Private Investments in Innovation Capabilities: Structural Transformation in the Chilean Wine Industry

43 Pages Posted: 20 Apr 2016

See all articles by Mark A. Dutz

Mark A. Dutz

World Bank

Stephen D. O'Connell

CUNY The Graduate Center - Department of Economics; World Bank

Javier L. Troncoso

University of Talca

Date Written: July 1, 2014

Abstract

This paper assembles novel data on the Chilean wine industry to investigate the role of investments in knowledge capital on sales growth in domestic and international markets. The study uses archival data collected from the Government of Chile to compile and categorize public expenditures and programs supporting the Chilean wine industry over the period of 1990-2012 into investment in different types of knowledge capital. These spending categories are related to industry-level sales growth. The paper finds that the most important correlate is spending on research and development. The study also uses data from a new survey of Chilean wine firms to capture information on firm-specific investments in knowledge capital. The findings show that investments in collaboration capital, in particular hiring foreign consultants, as well as participation in international wine fairs are the strongest correlates of growth in export sales, while spending on aspects of branding (local advertising and brand design) are the strongest correlates of domestic market sales growth.

Keywords: Marketing, Technology Innovation, Agricultural Industry, Technology Industry, Economic Policy, Institutions and Governance, Private Sector Development Law, Agribusiness & Markets, Private Sector Economics, Agricultural Producer Organizations

Suggested Citation

Dutz, Mark A. and O'Connell, Stephen D. and Troncoso, Javier L., Public and Private Investments in Innovation Capabilities: Structural Transformation in the Chilean Wine Industry (July 1, 2014). World Bank Policy Research Working Paper No. 6983. Available at SSRN: https://ssrn.com/abstract=2475070

Mark A. Dutz (Contact Author)

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Stephen D. O'Connell

CUNY The Graduate Center - Department of Economics ( email )

365 Fifth Avenue, 5th Floor
New York, NY 10016
United States

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Javier L. Troncoso

University of Talca

2 Norte 685
Talca, 3460000
Chile

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