Innovation often involves combining heterogeneous resources within the firm.

Professor Pedro Mendi discussed his recent paper that takes a closer look at the way firms combine human resources from different departments by analyzing firm-level data obtained from a series of innovation surveys conducted in Colombia by DANE. In particular, we test for the existence of complementarities between the involvement of R&D personnel and employees of any other department of the firm in innovation activities. As performance variables, we consider both the extensive and the intensive margins of innovation. In particular, we use the propensity to innovate, as well as the number of new innovative products that the firm introduces, the proportion of sales coming from products new to the firm, and sales from new products as a percentage of current innovation expenditures.

We allow for the possibility of different threshold effects in the classification of firms. We fail to find evidence of the existence of a complementarity relationship, and we find some evidence that suggests substitutability in the case of product innovations. We discuss a number of potential explanations for the results as well as extensions of the current analysis.