The effect of non-R&D innovation activities on firm productivity: The case of Turkey

The aim of this study is to reveal the contributions of firms' investments in non-R&D innovation activities to innovation and then firm productivity. The model used in the study is a version of the CDM (Crépon, Duguet, Mairesse) model developed by Lööf and Heshmati (2002) and later adapted by Griffith et al. (2006) in order to avoid the selection bias, simultaneity and endogeneity problems that occur due to the nature of the variables. The data used in the study were taken from the Community Innovation Survey (CIS) and Annual Industry and Service Statistics within the scope of micro A classification compiled by TÜİK for the periods 2016-2018, 2018-2020 and 2020-2022 were used. The research findings obtained from the CDM model estimation results show that investments made in non-R&D innovation activities increased the firm's sales per employee and the created added value through process innovation in the 2018-2020 and 2020-2022 periods, but did not affect the 2016-2018 period. The estimation result made from the pooled data obtained by combining the three periods also gave the same result as the 2018-2020 and 2020-2022 periods. The findings show that in order to increase the productivity of firms, priority should be given to non-R&D innovation activities with or without R&D, not limited to R&D activities only. In order to increase the productivity of firms, giving priority to non-R&D activities in the incentives and supports applied for innovation activities is a policy recommendation.