Drivers of technological capabilities in developing countries: An econometric analysis of Argentina, Brazil and Chile

This paper contributes to the literature that analyses the determinants and measurement of Technological Capabilities (TCs) with empirical evidence on Argentina, Brazil and Chile. Based on the World Bank's Investment Climate database, the study covers firms from the manufacturing sector. We first construct a Capability Score to provide a preliminary measure of Technological Capabilities at the firm level. We then test it econometrically to explore the determinants of TCs and exports and evaluate their reciprocal relationship through a Two Stage Probit. Our results show that exports and TCs significantly and positively influence each other in some of these countries.