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The missing link between innovation and performance in Brazilian firms: a panel data approach

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  • Juliana Gonçalves Taveira
  • Eduardo Gonçalves
  • Ricardo Da Silva Freguglia

Abstract

This study aims to verify if there is a positive relationship between innovation and productivity and/or profit in Brazil using a recursive model in line with the Crépon, Duguet and Mairesse (CDM) model. Using a rich combination of three databases, this paper considers a sample of more than 10,000 Brazilian industrial firms and the period 2001–2008. Besides using R&D expenditure as a measure of innovation input, this study also tests the technical-scientific personnel stock as a more appropriate measure of innovative effort in emerging countries. This variable considers the tacit knowledge intrinsic to the worker and corrects a possible measurement error bias in the R&D expenditure variable. The empirical strategy uses a reduced form of the CDM model in a panel data structure to provide consistent estimates as it controls for selectivity, simultaneity and endogeneity due to unobserved firm effects. There are still few studies that apply the CDM model for panel data, especially regarding developing countries. The main results suggest that technical-scientific workers positively affect the firms’ probability to innovate while R&D expenditure has no effect. The results also highlight the absence of the effect of innovation on productivity and profit, suggesting a missing link between innovative efforts and Brazilian firms’ performance.

Suggested Citation

  • Juliana Gonçalves Taveira & Eduardo Gonçalves & Ricardo Da Silva Freguglia, 2019. "The missing link between innovation and performance in Brazilian firms: a panel data approach," Applied Economics, Taylor & Francis Journals, vol. 51(33), pages 3632-3649, July.
    • Handle: RePEc:taf:applec:v:51:y:2019:i:33:p:3632-3649
    DOI: 10.1080/00036846.2019.1584374
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    Cited by:

    1. Cirera, Xavier & Martins-Neto, Antonio Soares, 2023. "Do innovative firms pay higher wages? Micro-level evidence from Brazil," Research Policy, Elsevier, vol. 52(1).
    2. Seclen-Luna, Jean Pierre & Alvarez Salazar, Jubalt & Cancino, Christian A. & Schmitt, Valentina, 2024. "The effects of innovations on peruvian companies’ sales: The mediating role of KIBS," Technovation, Elsevier, vol. 129(C).
    3. Betarelli Junior, Admir Antonio & Faria, Weslem Rodrigues & Gonçalves Montenegro, Rosa Livia & Bahia, Domitila Santos & Gonçalves, Eduardo, 2020. "Research and development, productive structure and economic effects: Assessing the role of public financing in Brazil," Economic Modelling, Elsevier, vol. 90(C), pages 235-253.
    4. Marco Túlio Dinali Viglioni & Mozar José Brito & Cristina Lelis Leal Calegario, 2020. "Innovation and R&D in Latin America and the Caribbean countries: a systematic literature review," Scientometrics, Springer;Akadémiai Kiadó, vol. 125(3), pages 2131-2167, December.
    5. Thiago Caliari & Philipe Scherer Mendes & Márcia Rapini & Camila Tolentino, 2021. "Technological Cumulativeness and Innovation in Brazilian Manufacturing Industry: Evidences from Brazilian Innovation Surveys 2008, 2011, and 2014," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(2), pages 876-898, June.
    6. Tatyana Boychenko, 2021. "Structure of Personnel in Scientific Organisations of the Ministry of Science and Higher Education of the Russian Federation for Individual Regions: Analysis of Primary Statistical Information," Science Governance and Scientometrics Journal, Russian Research Institute of Economics, Politics and Law in Science and Technology (RIEPL), vol. 16(1), pages 79-106, March.

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