Determining factors of the probability that an enterprise implements innovations

Abstract

This research addresses the relevance of entrepreneurship, innovation, and competitiveness as strategic pillars for developing microenterprises in the beauty sector, particularly in contexts of emerging economies such as Colombia. The study focuses on the need to understand how endogenous factors influence the ability of firms to innovate and sustain competitive advantages in a dynamic market. It focuses specifically on identifying the key determinants that influence the probability of innovation of micro-enterprises in the beauty sector in the Department of Tolima. For this purpose, the influence of the R&D Capacity, the level of Formal Education, the Initial Capital (logarithmically transformed), and the Age of Technology on the propensity to innovate is evaluated. The analysis was conducted using a quantitative approach, employing a Probit econometric model to estimate the probability of innovation. The results reveal that R&D Capability is the most significant factor positively associated with the probability of innovation.