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

• Main Authors: Dutz, Mark A, O'Connell, Stephen D, Troncoso, Javier L
• Format: Publication
• Language: English
• Published: World Bank Group, Washington, DC 01.07.2014
• Subjects: ADVERTISING; AFFILIATED ORGANIZATIONS; AGRICULTURE; BALANCE SHEET; BENCHMARK; BRAND; BRAND IMAGE; BRANDS; BUSINESS MODELS; BUSINESS PROCESS; BUSINESS PROCESSES; BUSINESS STRATEGY; BUSINESSES; BUYER; BUYERS; CAPABILITIES; CAPITAL ASSETS; CAPITAL EXPENDITURE; CAPITAL EXPENDITURES; CAPITAL INVESTMENT; CAPITAL INVESTMENTS; COLLABORATION; COMMODITY; COMPARATIVE ADVANTAGE; COMPETITIVE ADVANTAGE; COMPETITIVENESS; CONNECTIVITY; CONSULTING SERVICES; CONSUMER PREFERENCES; CONSUMERS; CUSTOMER LOYALTY; D SERVICES; DEVELOPMENT AGENCY; DEVELOPMENT POLICY; DIGITAL ASSETS; DISTRIBUTION NETWORKS; DOMESTIC MARKET; ECONOMIC DEVELOPMENT; ELASTICITY; EMERGING MARKET; ENTERPRISE SURVEY; EXCHANGE RATE; EXPENDITURES; EXPORT GROWTH; EXPORT MARKET; EXPORT MARKETS; EXPORTS; FAIRS; FOREIGN COMPETITORS; FOREIGN DIRECT INVESTMENTS; FOREIGN INVESTMENT; FOREIGN OWNERSHIP; FOREIGN SALES; GDP; GDP PER CAPITA; GLOBAL KNOWLEDGE; GLOBAL MARKET; GLOBAL MARKETS; GLOBALIZATION; GOVERNMENT SUBSIDIES; GRAPHIC DESIGNERS; GROWTH RATE; HARDWARE; HUMAN CAPITAL; INCOME; INDUSTRIAL DEVELOPMENT; INFORMATION SYSTEMS; INNOVATION; INNOVATION POLICY; INNOVATIONS; INPUT FACTORS; INTANGIBLE ASSET; INTANGIBLE ASSETS; INTELLECTUAL ASSETS; INTELLECTUAL PROPERTY; INTERNATIONAL COMPARISON; INTERNATIONAL MARKET; INTERNATIONAL MARKETS; INTERNATIONAL TRADE; INVENTORY; INVESTMENT DECISIONS; INVESTMENT IN KNOWLEDGE; INVESTMENT RATE; JOINT VENTURES; LABOR MARKET; LEARNING; LICENSE; LICENSE FEES; LICENSES; MANUFACTURING; MANUFACTURING INDUSTRIES; MARKET ECONOMY; MARKET FAILURES; MARKET REACH; MARKET SHARE; MARKETING; MARKETPLACE; MEDIA; MEDIUM ENTERPRISES; NATIONAL TRAINING; NETWORKS; NEW TECHNOLOGY; OPEN ACCESS; OPERATING SYSTEMS; ORGANIZATIONAL CAPITAL; OUTDATED TECHNOLOGIES; OUTPUT PER CAPITA; PEER-TO-PEER; POLITICAL ECONOMY; PORTFOLIO; PRIVATE INVESTMENT; PRIVATE INVESTMENTS; PRIVATE PARTNERSHIPS; PRIVATE SECTOR; PRODUCTIVITY; PRODUCTIVITY GROWTH; PROGRAMS; PUBLIC FUNDS; PURCHASING; R& RADIO; REGRESSION ANALYSIS; RESULT; RESULTS; RETAINED EARNINGS; RISK FACTOR; SERVICE CONTRACTS; SERVICE PROVIDERS; SOFTWARE DEVELOPMENT; SOFTWARE LICENSES; SOFTWARE SYSTEMS; SPECULATION; STOCKS; STORAGE CAPACITY; STRUCTURAL CHANGE; SUPERMARKETS; SUPPLIER; SUPPLIERS; SUPPLY CHAINS; TECHNICAL SUPPORT; TECHNICAL TRAINING; TECHNOLOGICAL DEVELOPMENT; TECHNOLOGICAL INNOVATION; TECHNOLOGY DEVELOPMENT; TECHNOLOGY TRANSFER; TELECOMMUNICATIONS; TERRORISM; TIME PERIOD; TOTAL FACTOR PRODUCTIVITY; TRADE FAIR; TRADE FAIRS; TRADEMARK; TRADEMARKS; TRAINING PROGRAMS; TRAINING SYSTEMS; USES; VALUE CHAINS; VOLATILITY; WEALTH; WEB; WORLD MARKETS

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.