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The impact of innovation activities on productivity and firm growth: evidence from Brazil

Micheline Goedhuys ()

No 2007-002, MERIT Working Papers from United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT)

Abstract: Using micro data from Brazilian manufacturing firms, this paper investigates the impact of a wide set of innovation activities on firms' total factor productivity (TFP) and its subsequent effect on firm growth, measured by sales. Controlling for size and age of the firms, productivity levels and productivity growth of firms over time are found to be key drivers of firm size adjustments. The activities leading to higher productivity levels are organizational change, cooperation with clients, human capital development, ICT usage, product innovation and learning by exporting, with an R&D effect only in the long run. Though the intensity with which firms engage in these innovation activities is sector dependent, innovation activities are in all sectors important for explaining sales growth differences, also in the more traditional sectors in which Brazilian firms have a competitive advantage.

Keywords: Technological Change; Research and Development; Innovation; Productivity; Manufacturing Industry; Total Factor Productivity; Brazil (search for similar items in EconPapers)
JEL-codes: D24 O12 O14 O32 (search for similar items in EconPapers)
Date: 2007
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