Article thumbnail

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

By Micheline Goedhuys


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.Technological Change, Research and Development, Innovation, Productivity, Manufacturing Industry, Total Factor Productivity, Brazil

OAI identifier:

Suggested articles


  1. (1982). 30 APPENDIX Calculation of TFP To analyse firm productivity, total factor productivity levels are calculated for the years 2000 and 2002 following the methodology developed by Caves
  2. (1980). A heteroskedasticity-consistent covariance matrix estimator and a direct test for heteroskedasticity,
  3. (1994). Age, size, growth and survival: UK companies in the 1980s,
  4. (2007). Are corruption and taxation really harmful to growth? Firm level evidence,
  5. (2005). Business Environment and Comparative Advantage in Africa: Evidence from the Investment Climate Data, Center for Gobal Development, working paper 56.
  6. (2005). Designing a Policy-Relevant Innovation Survey for NEPAD, mimeo, Maastricht, the Netherlands Van Biesebroeck,
  7. (1992). Empirical evidence on determinants of firm growth,
  8. (1990). Empirical implications of alternative models of firm dynamics,
  9. (2005). Financial and legal constraints to growth: does firm size matter?,
  10. (2001). Firm dynamics and productivity growth: a review of micro evidence of OECD countries, Economic department working papers n° 297, ECO/WKP(2001) 23,
  11. (1996). Fostering Technological Dynamism: Evolution of Thought on Technological Development Processes and Competitiveness. A Review of the Literature. United Nations: Geneva and
  12. (1996). Growth of micro and small enterprises in southern Africa,
  13. (1989). Innovation and Learning: The Two
  14. (2003). Investment Climate and Firm Performance in developing countries, mimeo the World Bank Development Research Group,
  15. (2005). Investment Climate Assessment, Volume II, mimeo, the World Bank,
  16. (2000). j j i j j i i i
  17. (2005). Learning-by-doing, learning-by-exporting, and productivity: evidence from Colombia, World Bank Working Paper Series 3544,
  18. (1931). Les inégalités économiques,
  19. (2000). Local Systems of Innovation in a Globalized World Economy,
  20. (2004). Microeconomic evidence of creative destruction in industrial and developing countries,
  21. (2003). On the evolution of the firm size distribution: facts and theory,
  22. (1978). On the size distribution of business firms,
  23. (2005). Oslo Manual, Guidelines for collecting and interpreting innovation data, rd edition.
  24. (1982). Output, input and productivity using superlative index numbers,
  25. (2003). Productivity, output and failure: a comparison of Taiwanese and Korean manufacturers,
  26. (1982). Selection and the evolution of industry,
  27. (2001). Standardisation of indicators of Technological Innovation in Latin American and Caribbean countries,
  28. (1992). Technological Capabilities and industrialisation,
  29. (1992). The creation of technological capabilities in developing countries,
  30. (1987). The relationship between firm growth, size and age: estimates for 100 manufacturing industries,
  31. (2006). What drives productivity in Tanzanian manufacturing firms: technology or institutions?, UNU-MERIT working paper 2006/39,

To submit an update or takedown request for this paper, please submit an Update/Correction/Removal Request.