Evolution of the short-fiber technological trajectory in Brazil's pulp and paper industry: The role of firm-level innovative capability-building and indigenous institutions

Paulo N. Figueiredo

Forest Policy and Economics, 2016, vol. 64, issue C, 1-14

Abstract: Despite the growing interest in innovation in the pulp and paper industry (PPI) from strategic management and institutional standpoints, little empirical research exists on the role of firms' technological capabilities and institutions in shaping particular technological trajectories within the industry. The objective of this article is to examine the relationship among firms' technological capability-building process, indigenous institutions, and the evolution of a particular technological trajectory within the PPI. To meet this objective, this article draws on a case study design based on primary and long-term evidence gathered through extensive fieldwork in Brazil. This article shows that (1) Brazil's PPI began by developing technological capabilities in long-fiber technology led by global leaders; instead of moving on a subsequent path-following trajectory, these firms accumulated innovative capabilities that led to the development of the short-fiber trajectory; (2) these capabilities initially permitted the implementation of incremental changes in forestry and process technologies, which evolved into sophisticated R&D; and (3) indigenous institutions shaped this trajectory by providing firms with human capital and research support, funding for production and initial innovative capability development, and IPO and entry into export markets. These capabilities and institutions were effective in developing a technological trajectory that enabled Brazil's PPI to achieve an internationally leading position in this industry; however, new capabilities and institutional arrangements are needed to support Brazil's PPI firms' incipient diversification and to mitigate self-reinforcement. This article shows that innovative capability building combined with effective indigenous institutions enable firms—even those from a late-industrializing country—to create a new technological trajectory. Given the innovation opportunities in the PPI, managers and policy makers should not be satisfied with their achievements; rather, they should be alert to innovative new entrants and explore novel technologically advanced paths.

Keywords: Innovative capability-building; Innovation; Institutions; Latecomer firms; Pulp and paper industry, Brazil (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:forpol:v:64:y:2016:i:c:p:1-14

DOI: 10.1016/j.forpol.2015.12.008

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