Complementarity of Innovation Policies in the Brazilian Industry: An Econometric Study

28 Pages Posted: 8 Dec 2009

See all articles by Eduardo Strube

Eduardo Strube

Universidade Federal do Rio de Janeiro (UFRJ)

Marcelo Resende

Universidade Federal do Rio de Janeiro (UFRJ); CESifo (Center for Economic Studies and Ifo Institute)

Date Written: September 2009

Abstract

The paper aims at assessing discrete complementarities in innovation policies in the context of the Brazilian industry in 2003. The paper considers the approach advanced by Mohnen and and Röller [European Economic Review, 2005] that focuses on supermodularity and submodularity tests for obstacles to innovation (in the present application: lack of finance sources, lack of skilled personnel, lack of cooperation opportunities and lack of information on technology or markets). The application 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. The evidence, unlike previous evidence, is not totally clear cut in terms of contrasts of the two phases. Nevertheless one can detect some substitutability and complementarity for specific pairs of obstacles in analysing the propensity to innovate, and strong evidence of complementarities in obstacles when considering the intensity of innovation. In the latter case, therefore, the evidence is suggestive and favours the adoption of more targeted incentive policies.

Keywords: supermodularity, complementarities, innovation

JEL Classification: L50, O31, O38

Suggested Citation

Strube, Eduardo and Resende, Marcelo, Complementarity of Innovation Policies in the Brazilian Industry: An Econometric Study (September 2009). CESifo Working Paper Series No. 2780, Available at SSRN: https://ssrn.com/abstract=1476216

Eduardo Strube

Universidade Federal do Rio de Janeiro (UFRJ) ( email )

Av; Pasteur, 250
terreo - Bairro Maracana
Rio de Janeiro, Rio de Janeiro 23890000
Brazil

Marcelo Resende (Contact Author)

Universidade Federal do Rio de Janeiro (UFRJ) ( email )

Rua Sao Francisco Xavier, 524
Instituto de Economia
Rio de Janeiro RJ 21949
Brazil

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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