Complementarity of innovation policies in Brazilian industry: An econometric study

The paper aims to assess discrete complementarities in innovation policies in the context of Brazilian industry in 2003. We focus on complementarity and substitutability tests for obstacles to innovation (in the present application, lack of: finance sources, skilled personnel, cooperation opportunities, and information on technology or markets). The application, based on the Brazilian innovation survey (PINTEC-IBGE, 2003. Pesquisa Industrial de Inovação Tecnológica 2003. Retrieved October 23, 2013, from http://www.ibge.gov.br/home/estatistica/economia/industria/pintec/2003/pintec2003.pdf), avoids micro-aggregation of the data and explicitly considers sampling weights in the econometric estimation. The analysis highlights the two phases of the innovation process in terms of the propensity and intensity of innovation. We find evidence that firms subject to international competition have higher propensity to innovate. We also present some evidence that foreign ownership may be a driver to the propensity of innovation when companies actually innovate in the host countries. The evidence, unlike previous results, is not totally clear-cut in terms of contrasts of the two phases. Nevertheless, we can detect some substitutability and complementarity for specific pairs of obstacles regarding the propensity to innovate, and some evidence of complementarities in obstacles when considering intensity of innovation. Evidence is suggestive and favors the adoption of more targeted incentive policies for innovation.