Determinants of a firm's likelihood to innovate and intensity of innovation in the Brazilian food industry

Abstract

This paper defines the relative role of firms' characteristics on both their likelihood to innovate and the intensity of innovation (innovative outputs). Using Christensen's (1995; 1996) and Teece's (1986) proposals for analysing assets (resources and capabilities) and inter-asset linkages in order to produce and commercially exploit technological innovation, a conceptual framework is defined suitable to identify the variables affecting the probability of a firm to innovate and those affecting a greater count of innovations, once the firm has decided to innovate. Thus, a "double-hurdle" approach involving censored and truncated models was applied. The findings confirm that firms innovative assets investment in external technology, investment in R&D, and external alliances, alongside firm size are the significant variables in determining firms' likelihood to innovate, whereas external alliances, firm size and market orientation are related to intensity to innovate in the Brazilian Food Industry.