Collaborating to Innovate Green: Scope and Limits of Business Alliances in Latin America

Abstract

What role does collaboration between firms and institutions play when Latin American companies attempt to eco-innovate and run into obstacles? The study draws on the Harmonized Latin American Innovation Surveys (LAIS) compiled by the Inter-American Development Bank: 30 surveys conducted between 2007 and 2017 across ten countries, comprising 119,900 firm-level observations, restricted to the 71,783 potentially innovative firms. The results show that collaboration has a positive effect on innovation outcomes across all estimated models, but its capacity to buffer obstacles varies by barrier: it significantly attenuates knowledge obstacles and partially reverses market ones, while moderating neither financial nor regulatory barriers. The latter contradict the optimistic version of the Porter hypothesis, since the institutional environment proves so adverse that not even cooperation networks manage to offset it. The Chilean case illustrates this tension: the R&D Tax Incentive Law shows only marginal uptake. The article concludes that firms in the region are eco-innovating in spite of the system, and that the transition toward a low-carbon development model requires coherent public policy, a stable regulatory framework, and green financing to complement private action.