Barriers to innovation in the Brazilian economy: impacts and lessons for public policy

Abstract

In an effort to understand the barriers of innovation, we explore a firm-level database from different waves of the Brazilian innovation survey. Our initial objective is to understand what main determinants of each obstacle for innovation are and whether complementarities between them exist. Subsequently, we address whether firms cooperate to overcome these barriers. Last, but not least, we investigate whether these barriers affect innovation inputs (R&D investments, for example) and outputs (product and/or process innovation). We find that the financial obstacles have a negative on cooperation and innovative activities, but they are not the most important obstacle to innovation outputs, as knowledge barrier presents robust outcomes deterring firms to introduce a new product or process.