Patterns of innovation and wage distribution. Do “innovative firms” pay higher wages? Evidence from Chile

In this paper we investigate the innovative patterns of Chilean productive sectors applying multivariate analysis methods such as factor and cluster analysis. Three main patterns are detected in our sample according to the type of innovation introduced and the motivation behind it: product strategy innovators, cost strategy innovators and non-innovators. Starting on this clustering, we analyze the relationship between innovative pattern (or type of innovation introduced) and wage for professional category. We found a positive impact of product innovations on wages for all professional groups except unskilled manual workers. Controlling for unobserved firm heterogeneity through a fixed effect panel estimator, coefficients are not significant anymore for all professional categories. Only for innovations in marketing we can still register a wage premium earned by high skilled workers. Finally, we do not register a polarization effect as the one detected for Europe by recent literature. Copyright Eurasia Business and Economic Society 2014