Innovation and productivity performance: how does Minas Gerais compare to other major states? Evidence from PINTEC 2000 and PIA 1996-2001
This paper uses data from a recent survey on the technological activity of Brazilian firms, organized according to international standard guidelines, to analyze their innovation performance, their trends in technical change, and the evolution of their technical efficiency. The first part of the study uses the survey to assess the innovation performance of the Brazilian firms in terms of R&D investment and patenting activity, the second part matches this recent one-time survey with a panel data, built from the yearly manufacturing census surveys done in 1996-2001, to analyze technical change evolution and efficiency trends in the country manufacturing divisions. The results corroborate the hypotheses that firm size affects both R&D investment and patenting activity, and patenting is also driven by R&D expenditures. Firms located in Minas Gerais (MG) are more likely to invest in R&D than the ones in Rio de Janeiro (RJ) but they lag behind their peers in Rio Grande do Sul (RS). The ranking of these states in terms of output shifts from a baseline production function shows each of them taking turns in leading the other ones in two of the six manufacturing divisions analyzed; however, their ranking in terms of efficiency shifts shows a more lopsided outcome: the states of RS and RJ hold the leading position three times each leaving no division to be claimed by the state of MG. In general there is a downward productivity trend in the period coupled with generalized increase of technical inefficiency. The outcome characterizes a situation in which pushing up the technological frontier matters less than diffusing the best-practice, and the extent and rate of this type of diffusion process are extremely relevant for government and private sector policies to encourage productivity growth.
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