Economic crisis and organisational change in developing countries: evidence from Chile

International Journal of Technological Learning, Innovation and Development

Volumn 3, Issue 1, 2010, Pages 67-86

  Álvarez, Roberto ^a   Miguel Benavente, José ^a   Crespi, Gustavo ^b  

^a UNIVERSITY OF CHILE   (Chile)

^b Inter American Development Bank (IADB)   (United States)

Author keywords

innovation; organisational change

Indexed keywords

EID: 78649598689     PISSN: 17531942     EISSN: 17531950     Source Type: Journal    
DOI: 10.1504/IJTLID.2010.031054     Document Type: Article

References (35)

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24. One exception is Alcorta (2001), but the evidence is limited to only 62 engineering firms in six developing countries. A descriptive analysis of organisational change for Hungarian industry can be found in Ádám (1993).
25. They claim to deal with management innovation and not with any other type of technological innovation because, according to them, management innovation more perfectly matches a theoretical model where improvements are generated by workers devoting more time to reorganisation activity and less to production. In other words, the theoretical model is based on the idea of ‘improvements in the way things are done’. In addition to this, in the empirical model they also use a variable called ‘introduction of a new technology’, but they do not provide any explanation about why this variable could also be considered as good proxy for organisational change.
26. A related paper is Crespi et al. (2006) where, using a cross section sample of UK firms, organisational change is explained as a function of past changes in market shares and ownership. However, the focus in that paper is on the effects of organisational change on productivity growth.
27. This does not mean that large firms are more ‘flexible’ than small ones. Flexibility might well be approximated by ψ which could well be higher for a small firm (meaning a lesser loss of efficiency due to organisation change). Proposition 1 means that larger firms will have more incentives to change their organisation during bad times given ψ.
28. In both surveys, information is collected at establishment level. We cannot identify which establishment belongs to the same firm; therefore, we are not able to study organisational changes that are common to or within the same organisation (firm). The prevalence of multiplant firms, however, is negligible in this dataset (less than 8% according to the National Institute of Statistics).
29. As we show in the appendix, estimating an ordered Probit yields similar results.
30. Both innovation surveys enquire about innovations that occurred during the previous three years, that is, 1996–1998 for the first survey and 1999–2001 for the second survey. However, while manufacturing output grew in all of the years covered in the first survey, in 1999 – covered in the second survey – manufacturing output actually declined by 1.3%. This was the first drop in manufacturing output in over a year.
31. See also Caroli et al. (2001).
32. We tried other definitions of skills, such as relative wages between skilled and unskilled, and the results were similar.
33. Probit models for the three types of organisational change were estimated independently. Given that error terms are potentially correlated in the three equations, we also estimated a multivariate Probit using simulated maximum likelihood (Cappellari and Jenkins, 2003). The results – shown in the Appendix – are similar to those reported in Table 2.
34. All of the other variables are evaluated at the sample mean.
35. We also estimate a Probit equation including interaction terms between our crisis variables and size. Table A3 of the appendix shows that most of these interactions (10 over 12) are not significant. Overall, the evidence suggests that there are not differences in response to economic crisis according to firm size.