Modes of innovation in an emerging economy: a firm-level analysis from Mexico

Firms that combine both the science, technology, and innovation (STI) and learning-by-doing, learning-by-using, and learning-by-interacting (DUI) modes of innovation are more likely to attain innovation outcomes than those employing either mode separately. Different studies across Europe and Canada support this proposition to different extents. However, the core of these studies has been carried out in advanced economies, inadvertently neglecting other relevant innovation milieus. This study examines the nuances of such innovation strategy in an emerging economy context. We explore differences and potential limitations in the existent literature. The analysis covers 9 628 Mexican firms with 10 or more employees. The results of the logit regressions suggest that a combined STI and DUI innovation approach yields better results in terms of product innovation. Contrary to the existing literature, our results point out that in an emerging economy context, the weight of DUI mode of innovation is larger on product innovation than the STI mode. Finally, DUI mode has a greater impact on process innovation than STI mode as well as the combination of STI and DUI; thus, showing that the benefits of combining STI and DUI are limited only to product innovation.