Innovation and productivity: empirical evidence for Brazilian industrial enterprises

Carvalho, Luciana; Avellar, Ana Paula Macedo de

doi:10.1016/j.rausp.2016.12.009

Luciana Carvalho ^** Corresponding author at: Av. João Naves de Ávila, 2121, CEP 38408-208, Uberlândia, MG, Brazil. E-mail:lu_carvalho@hotmail.com (L. Carvalho).

Universidade Federal de Uberlândia, Uberlândia, MG, Brazil

Ana Paula Macedo de Avellar

Universidade Federal de Uberlândia, Uberlândia, MG, Brazil

* Corresponding author at: Av. João Naves de Ávila, 2121, CEP 38408-208, Uberlândia, MG, Brazil. E-mail:lu_carvalho@hotmail.com (L. Carvalho).

Conflicts of interest

The authors declare no conflicts of interest.

Year	Author	Country	Related Variables	Econometric Method	Result
Developed countries
2001	Wakelin	United Kingdom	TFP, Spending on R&D	Panel	Associated coefficient positive and statistically significant.
2004	Huergo and Jaumandreu	Spain	TFP and product innovations	Panel	Associated coefficient positive and statistically significant.
2005	Argilés, Potters and Vivarelli	Europa	TFP, Spending on R&D	Panel	Associated coefficient positive and statistically significant.
2006	Griffith et al	France, Germany, Spain and United Kingdom	TFP, Spending on R&D, Innovation	CDM	Associated coefficient positive and statistically significant.
2006	Rogers	United Kingdom	WP, Spending on R&D	OLS/ Panel	Associated coefficient positive and statistically significant.
2006	Parisi, Schiantarelli and Sembenelli	Spain	TFP, new products and processes and spending on R&D	Probit	Associated coefficient positive and statistically significant for spending on R&D.
2009	Mairesse and Robin	France	WP P product and process innovation	Simultaneous Equations	Associated coefficient positive and statistically significant for product innovation.
2010	Cassiman, Golovko and Martinez-Ros	Spain	TFP, product and process innovation and Export	Panel	Associated coefficient positive and statistically significant for product and process innovation
Developing countries
2002	Benavente	Chile	WP, spending on R&D, new products	OLS	Associated coefficient not significant for spending on R&D and new products
2004	Wang	Taiwan	TFP, spending on R&D	Panel	Associated coefficient positive and statistically significant.
2006	Chudnovsky, López and Pupato	Argentina	WP, new products and processes	CDM	Associated coefficient positive and statistically significant.
2011	Zhang et AL	China	TFP, spending on R&D	Panel	Associated coefficient positive and statistically significant for more industrialized regions.
2007	Goedhuys	Brazil	WP, new products and processes	OLS	Associated coefficient not significant.
2009	Silva	Brazil	TFP, spending on R&D and Machinery and Equipment	CDM	Associated coefficient positive and statistically significant for product innovation and not significant for process innovation.
2009	Britto	Brazil	WP, spending on R&D and spending on Machinery and Equipment	Panel	Associated coefficient positive and statistically significant for spending on Machines and Equipment
2011	Santana, Cavalcanti and Bezerra	Brazil	WP, product and process innovation.	Associated coefficient positive and statistically significant.	Associated coefficient positive and statistically significant.

Variables	2003		2005		2008
	Company		Company		Company
	Freq.	%	Freq.	%	Freq	%
ORIGIN OF CAPITAL	565	19.85	559	19.64	610	21.43
TRAINING	814	28.60	807	28.36	909	31.94
COOPERATION	402	14.13	557	19.57	484	17.01
PATENTS	1295	45.50	1047	36.79	1596	56.08
EXPORT	1909	67.08	1966	69.08	1966	69.08

Variable name	Description	Expected sign	Cross section	Panel
A) Company characteristics
PO	Employed persons	+	X	X
OP	Square of employed persons	+	X	X
AGE	Years since the formal start of the company	+	X	X
ORIGIN OF CAPITAL	Binary variable: 0 - company does not possess foreign capital participation 1 - company possesses foreign capital participation.	+	X	X
B) Technological capacity
SKILL	Percentage of employed persons with more than 12 years schooling.	+	X	X
FINANCING	Percentage of external financing	+	X	X
COOPERATION	Binary variable: 0 - company does not participate in cooperative arrangements 1 - company participates in cooperative arrangements.	+	X	X
TRAINING	Binary variable: 0 - company does not conduct training 1 - company conducts training.	+	X	X
PATENT	Company obtained patent. Binary variable: 0 - industry with low and medium-low technological intensity 1 - industry with high technological intensity.	+	X	X
R&D	Intensity of R&D: Spending on R&D in relation to net revenue	+		X
M&E	Intensity of Investment in machinery: Spending on M&E in relation to net revenue	+		X
C) Characteristics of the industrial sector in which the company operates
HIGH TECH	Company that belongs to high technological intensity sectors according to Lall (2000). Binary variable: 0 - industry with low and medium-low technological intensity. 1 - industry with high technological intensity.	+	X
MEDIUM TECH	Company that belongs to medium technological intensity sectors according to Lall (2000). Binary variable: 0 - industry with low and high technological intensity. 1 - industry with medium technological intensity.	+	X
LOW TECH	Company that belongs to low technological intensity sectors according to Lall (2000). Binary variable: 1 - industry with high and medium technological intensity. 0 - industry with low technological intensity.	-	X
D) Innovation indicators
INOVA	Binary variable: 0 - company did not introduce new or significantly improved product or process. 1 - company introduced new or significantly improved product or process.	+	X	X
INOVA_PROD	Binary variable: 0 - company did not introduce new or significantly improved product. 1 - company introduced new or significantly improved product.	+	X	X
INOVA_PROC	Binary variable: 0 - company did not introduce new or significantly improved process. 1 - company introduced new or significantly improved process.	+	X	X
INOVA_ORG	Binary variable: 0 - company did not introduce new management techniques to improve routines and work practices within the company 1 - company introduced new management techniques to improve routines and work practices within the company.	+	X	X
TI	Standardized indicator oftechnological capabilities (lall, 1987, 1992; wignaraja, 2011, avellar and carvalho, 2013). Selected technological Capabilities: 1. Improvement of equipment; 2. License for technology use; 3. Quality improvement; 4. Improvement or adaptation of products; 5. Introduction of new products; 6. R&D activity; 7. Subcontracting; 8. Technology networks.	+	X	X

Variables	2003		2005		2008
	Companies		Companies		Companies
	Mean	Var. Coeff.	Mean	Var. Coeff.	Mean	Var. Coeff.
PO	765.75 (1719.05)	2.2	861.66 (2008.18)	2.3	948.92 (2418.94)	2.5
AGE	23.63 (12.03)	0.5	25.63 (12.03)	0.5	28.72 (12.12)	0.4
R&D	0.007 (0.031)	4.4	0.014 (0.037)	2.6	0.006 (0.032)	5.3
INOV	0.033 (0.094)	2.8	0.040 (0.41)	10.3	0.038 (0.363)	9.6
M&E	0.02 (0.07)	3.5	0.18 (0.08)	0.4	0.026 (0.35)	0.1
SKILL	0.006 (0.032)	5.3	0.007 (0.034)	4.9	0.009 (0.195)	21.7
TI	0.33 (0.22)	0.7	0.38 (0.25)	0.7	0.43 (0.21)	0.5
WP	79.05 (185.45)	2.3	87.00 (143.39)	1.6	106.91 (225.17)	2.1
TFP	15.26 (3.26)	0.2	15.51 (3.01)	0.2	16.33 (2.94)	0.2
Total	2846		2846		2846

Variables	2003		2005		2008
	Company		Company		Company
	Freq.	%	Freq.	%	Freq	%
INOVATION OF PRODUCT	1243	43.68	1494	52.49	1237	43.46
INOVATION OF PROCESS	1497	52.60	1794	63.04	1428	50.18
INOVATION OF PRODUCT OR PROCESS	1798	63.18	2187	76.84	1697	59.63
ORGANIZATIONAL INOVATION	1900	66.76	1882	66.13	2090	73.44

Variables	Work productivity					Total factor productivity
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
PO	−0.005 (0.004)	−0.006 (0.004)	−0.005 (0.004)	−0.005 (0.004)	−0.007 (0.004)	1.686 (183.6)	3.367 (182.4)	2.283 (184.0)	3.526 (184.2)	2.091 (182.2)
PO2	0.000 (0.000)	0.000 (0.000)	0.000 (0.000)	0.000 (0.000)	0.000 (0.000)	0.013 (0.013)	0.013 (0.134)	0.013 (0.013)	0.013 (0.013)	0.013 (0.013)
AGE	0.339 (0.345)	0.320 (0.343)	0.392 (0.360)	0.362 (0.350)	0.316 (0.341)	2265.2 (1750.5)^* ***** p< 0.1,	4375.4 (1780.5)^* ***** p< 0.1,	4419.0 (1785.9)^* ***** p< 0.1,	4402.7 (1788.3)^* ***** p< 0.1,	4636.2 (1903.4)^* ***** p< 0.1,
ORIGIN OF CAPITAL	118.81 (18.861)^* * p< 0.001,	116.83 (18.206)^* * p< 0.001,	119.78 (18.721)^* * p< 0.001,	118.21 (18.508)^* * p< 0.001,	114.25 (17.843)^* * p< 0.001,	14 028.2 (51 604)^ p< 0.05,	14 355.4 (52 755)^ p< 0.05,	144 000 (55 241)^ p< 0.05,	145 268.9 (40 730)^ p< 0.05,	142 165.5 (49 977)^ p< 0.05,
SKILL	22.055 (34.770)	21.177 (33.978)	22.939 (34.772)	22.596 (34.543)	22.009 (33.654)	2710.5 (4630.1)	28 704.9 (4630.1)	30 525.3 (45 788.2)	29 188.2 (44798.0)	46 932 (50 633.4)
FINANCING	−0.0504 (0.224)	−0.1038 (0.230)	−0.0068 (0.238)	−0.05054 (0.231)	−0.1698 (0.226)	−591.95 (841.94)	−489.24 (880.46)	−476.80 (879.55)	−445.32 (929.84)	182.23 (961.78)
COOPERATION	32.923 (15.749)^* ***** p< 0.1,	29.674 (14.864)^* * p< 0.001,	36.129 (14.657)^ p< 0.05,	32.587 (14.461)^ p< 0.05,		217 350.2 (114 795)	225 494.2 (115 718)	225 494.2 (115 718)	227 139.3 (113 187.2)	341 262.5 (190 846.6)
TRAINING	46 282.7 (27 730)	55 850** (33 007)	48 663.4 (29 253)	44 972.04 (29 253)	147 257.9 (71 303.5)	36 282.7 (27 730)	95 850** (33 007)	49 663.4 (29 253)	56 972.04 (29 253)	157 257.9 (71 303.5)
PATENT	8.1454 (10.716)	5.3506 (7.622)	−0.1247 (12.215)	2.1889 (8.571)	2.300 (7.764)	129 163.3 (63 127.6)	129 163.3 (63 127.6)	10 355*** (47 374.4)	94 121.77** (30 046.8)	20 868.7 (44 249.1)
HIGH_TECH	15.380 (13.351)	9.4119 (14.206)	19.594 (12.749)	17.6029 (13.073)	8.2613 (14.256)	−36 965.6 (41 980.9)	−31 947.3 (40 492.1)	−25 070.5 (33 688.1)	−25 690.1 (33 276.8)	−20 188.9 (44 667.3)
MEDIUM_TECH	47.746 (12.053)^* * p< 0.001,	45.951 (11.957)^* * p< 0.001,	49.486 (11.509)^* * p< 0.001,	48.044 (11.691)^* * p< 0.001,	43.457 (11.953)^* * p< 0.001,	78 058 (32 004)^* ***** p< 0.1,	81 096 (30 697)^* ***** p< 0.1,	81 237 (31 456.8)^* ***** p< 0.1,	82 643 (30 236.8)^* ***** p< 0.1,	71 468.2 (33 909.8)^* ***** p< 0.1,
INOVA2005	15.113 (6.614)^ p< 0.05,					69 038.4 (84 109.2)
INOVA2008	12.992 (12.971)					26 598.6 (18 196.8)
INOVA_PROD 2005		25.472 (7.755)^ p< 0.05,					14 645.5 (41 928.5)
INOVA_PROD 2008		14.76 (8.752)^* ***** p< 0.1,					14 527.0		(17 697.0)
INOVA_PROC 2005			12.86 (7.0644)^* ***** p< 0.1,					32 416.2 (22 445.7)
INOVA_PROC2008			5.4762 (11.421)					25 462.7 (66 104)
INOVA_ORG 2005				21.694 (6.200)^* * p< 0.001,					4160.3 (20 331.4)
INOVA_ORG 2008				20.489 (6.778)^ p< 0.05,					30 676.0 (31 958.0)
TI 2005					81.240 (19.373)^* * p< 0.001,					362 322 (158 317)^* ***** p< 0.1,
TI 2008					9.465 (36.310)					−859 474 (576 607)
Observations	2846	2846	2846	2846	2846	2846	2846	2846	2846	2846
R-square	0.2333	0.2343	0.2102	0.2131	0.2400	0.4190	0.4191	0.4191	0.4191	0.4233

Variables	Work productivity					Total factor productivity (residual)
	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
PO	−0.021 (0.003)^* * p< 0.1,	−0.021 (0.003)^* * p< 0.1,	−0.021 (0.003)^* * p< 0.1,	−0.021 (0.003)^* * p< 0.1,	−0.020 (0.003)^* * p< 0.1,	−74.892 (11.90)^* * p< 0.1,	−74.319 (11.90)^* * p< 0.1,	−74.653 (11.90)^* * p< 0.1,	−74.234 (11.89)^* * p< 0.1,	−72.527 (11.89)^* * p< 0.1,
PO2	3.240 (6.300)^* * p< 0.1,	3.250 (6.300)^* * p< 0.1,	3.260 (6.300)^* * p< 0.1,	3.250 (6.300)^* * p< 0.1,	3.200 (6.300)^* * p< 0.1,	0.010 (0.000)^* * p< 0.1,	0.010 (0.000)^* * p< 0.1,	0.010 (0.000)^* * p< 0.1,	0.010 (0.000)^* * p< 0.1,	0.010 (0.000)^* * p< 0.1,
AGE	5.443 (0.536)^* * p< 0.1,	5.435 (0.536)^* * p< 0.1,	5.427 (0.536)^* * p< 0.1,	5.440 (0.538)^* * p< 0.1,	5.692 (0.566)^* * p< 0.1,	11.583 (2095)^* * p< 0.1,	11.646 (2095)^* * p< 0.1,	11.608 (2095)^* * p< 0.1,	11.645 (2101.4)^* * p< 0.1,	14 461 (2209.4)^* * p< 0.1,
ORIGIN OF CAPITAL	25.308 (9.767)^* ***** p< 0.001,	25.235 (9.767)^* ***** p< 0.001,	25.120 (9.767)^* ***** p< 0.001,	25.230 (9.767)^* ***** p< 0.001,	25.385 (9.767)^* ***** p< 0.001,	7885.1 (38 139)	8461.1 (38 142)	7815.3 (38 142)	8502.8 (38 143)	10 401 (38 091)
SKILL	−5.572 (12.40)	−5.731 (12.40)	−5.952 (12.40)	−5824 (12.40)	−5223 (12.40)	−5223 (48 447)	−83 425 (48 451)	−85 457 (48 431)	−79 572 (48 439)	−22 047 (48 377)
FINANCING	−0.028 (0.130)	−0.028 (0.130)	−0.030 (0.130)	−0.030 (0.130)	−0.010 (0.131)	−21 769 (51 106)	−21 192 (51 131)	−21 474 (51 131)	−20 714 (51 110)	−51 079 (51 114)
COOPERATION	5418 (4.580)	5.319 (4.602)	4.929 (4.573)	5.145 (4.568)		454 261 (17 883)	606 622 (17 974)	558 176 (17 857)	67 333 (17841)
TRAINING	0.807 (3.753)	0.477 (3.724)	0.001 (3.729)	0.316 (3.689)	2.386 (3.886)	−18246 (14655)	−15187 (14546)	−16510 (14562)	−14 580 (14 406)	5844.7 (15157)
PATENT	−2.003 (4.808)	0.096 (3.516)	1.472 (3.962)	0.447 (3.339)	−1.010 (3.447)	19514.2 (18773)	3374.36 (13730)	9118.9 (15473)	21 334 (13 039)	−12 667 (13 445)
R&D	−9.927 (6.388)	−9.954 (6.388)	−9.925 (6.388)	−9.966 (6.388)	−9.891 (6.388)	147 777 (24 942)	171 653 (24 945)	20 740 (24 946)	17 592 (24 946)	24 859 (24 910)
M&E	−3.911 (5.479)	−4.089 (6.736)	−4.201 (6.740)	−4.096 (6.736)	−4.076 (6.735)	−24 991 (26 332)	−12 392 (26 307)	−90.16 (26 373)	−1224 (26 207)	−17 739 (26 269)
INOVA	3.943 (5.479)					27 507.19 (21 395.8)
INOVA_PROD		1.390 (3.984)					4514.24 (15 560.0)
INOVA_PROC			1.818 (4.017)					13 424.39 (15 605.7)
INOVA_ORG				0.0513 (3.268)					590.34 (12 764.8)
TI 2005					−12.155 (9.511)					143 607.3 (37 093)^* * p< 0.1,
Observations	8538	8538	8538	8538	8538	8538	8538	8538	8538	8538
Enterprises	2846	2846	2846	2846	2846	2846	2846	2846	2846	2846
R² adjusted	0.262	0.261	0.249	0.259	0.260	0.362	0.362	0.362	0.362	0.362
Hausman test	*193.67 (0.000)*	*196.4 (0.000)*	*191.31 (0.000)*	*197.32 (0.000)*	*189.3 (0.000)*	*101.76 (0.000)*	*102.77 (0.000)*	*102.42 (0.000)*	*102.79 (0.000)*	*104.3 (0.000)*

\begin{matrix} Productivity = α + λ_{1} Employed Persons + λ_{2} Employed {Persons}^{2} + λ_{3} age + λ_{3} Foreing Capital \\ + β_{1} Skill + β_{2} Financing + β_{4} Cooperation + β_{5} Training +_{6} Patent + β_{7} R & D + β_{8} Spending \\ Machinery + π_{1} hightech + π_{2} mediumtech + μ_{3} Innovation Insicator \end{matrix}

[1] * Corresponding author at: Av. João Naves de Ávila, 2121, CEP 38408-208, Uberlândia, MG, Brazil. E-mail:lu_carvalho@hotmail.com (L. Carvalho).

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Abstract