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Innovation, market power and biotechnology in the Brazilian Chemical industry

Gilson Silva jr (), José Silveira (), Júlia Paranhos (), Lia Hasenclever () and Rogério Miranda ()
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Gilson Silva jr: Federal University of Santa Catarina - Brazil
José Silveira: State University of Campinas - Brazil
Júlia Paranhos: Federal University of Rio de Janeiro - Brazil
Lia Hasenclever: Federal University of Rio de Janeiro - Brazil
Rogério Miranda: Institute of Applied Economic Research - Ipea

Economics Bulletin, 2017, vol. 37, issue 2, 1210-1216

Abstract: The aim of this paper is to analyze ex-ante (market share) and ex-post (appropriability) market power and the impact of biotechnology on Brazilian Chemical industry firms' innovation and R&D decisions using microdata from Brazilian innovation surveys. The same study was carried out on firms from the general manufacturing industry and used as a benchmark. This kind of research is particularly important given that innovation and biotechnology are on government and industry agendas. The descriptive results show that chemical industry firms on average use more biotechnology, are more innovative, use more appropriability mechanisms and have a larger market share than manufacturing industry firms. Regression analysis results suggest that ex-ante and ex-post market power have a positive impact on decisions made by manufacturing and chemical industry firms in terms of both R&D and innovation. Biotechnology has an overall positive impact on all manufacturing industrial firms R&D and innovative activity. Regarding chemical industry firms, the positive impact is only noted on continuous R&D. This suggests that biotechnology in the chemical industry is a specific innovative effort that can spread throughout the whole industry since chemistry is part of all products and production processes. Considering the industry as a whole, biotechnology is most likely only viewed as a production and processing alternative. Despite this, the albeit limited use impacts the whole industry.

Keywords: Innovation; market power; biotechnology; Chemical industry (search for similar items in EconPapers)
JEL-codes: L6 O3 (search for similar items in EconPapers)
Date: 2017-06-05
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