The Role of Technology Extension and Transfer in Firms’ Innovation and Productivity in Peru

This study examines how technologyextension and transfer services (TETS) drive firm-level innovation andproductivity. Since research and development (R&D) investments are subjectto market failure, engaging with external agents enables firms to innovate atlower risk and cost. Using data from Peru’s National Innovation Survey (ENI),we apply the Crépon, Duguet, and Mairesse (CDM) model alongside propensityscore matching (PSM) to enhance the reliability of our results. Additionally,we employ the generalized propensity score (GPS) method to analyze thesensitivity of innovation and sales outcomes to varying investment levels. Thefindings confirm that investment in training and external R&D significantlyenhances innovation, thereby boosting labor productivity. However, thisrelationship is nonlinear, suggesting the presence of investment thresholdsrequired to maximize impact.

JEL Classification: L25, O32, O38

Keywords: Technology Transfer, Innovation,Productivity, R&D, CDM model

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