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Challenges for Innovation Due to Firm Size: The Case of Brazilian Industrial Firms
Abstract
This chapter analyses the innovative capacity of small firms compared to medium and large firms in Brazilian industry. It presents the Schumpterian debate regarding the role of small and large firms as inductors of innovation, including a brief discussion about the barriers and opportunities for innovation faced by small businesses, particularly in developing countries. The empirical analysis is based on the Brazilian Innovation Survey, which is used to compare the innovative efforts undertaken by small, medium and large enterprises. Its main findings are that in Brazil, large companies predominate in the creation of new products and processes, while smaller perform more effort than those in innovations associated with processes modernization. However, from the observation of the industry sectorial structure, it identifies that in high-tech sectors, Brazilian small companies outperform large in efforts in R&D.
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