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Innovation strategies, process and product innovations and growth: Firm-level evidence from Brazil

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  • Goedhuys, Micheline
  • Veugelers, Reinhilde

Abstract

Using World Bank ICS 2000–2002 data from Brazilian manufacturing firms, this paper identifies innovation strategies of firms – in particular internal development (“technology make”) and external acquisition (“technology buy)” – and their effect on successful process and product innovations. It subsequently explores the importance of process and product innovations for firm growth. Successful process and product innovations occur mostly through “technology buy” (mostly through the purchase of machinery and equipment), either alone or in combination with a “technology make” strategy. The option of only relying on internal development is less successful. The results on firm growth indicate that innovative performance is an important driver for firm growth. It is particularly the combination of product and process innovations that significantly improves firm growth. Both innovation and growth performance are supported by access to finance. Skills of workforce and management matter, but not necessarily tertiary education levels. The impact of international linkages on innovative and growth performance is mixed.

Suggested Citation

  • Goedhuys, Micheline & Veugelers, Reinhilde, 2012. "Innovation strategies, process and product innovations and growth: Firm-level evidence from Brazil," Structural Change and Economic Dynamics, Elsevier, vol. 23(4), pages 516-529.
    • Handle: RePEc:eee:streco:v:23:y:2012:i:4:p:516-529
    DOI: 10.1016/j.strueco.2011.01.004
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    More about this item

    Keywords

    “Make” and “buy” innovation strategies; Process and product innovations; Firm growth; Brazil;
    All these keywords.

    JEL classification:

    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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