Financial Constraints for Innovation in Brazil
Latin American Business Review, 12(3), 165-185, october 2011
Posted: 22 Mar 2013
Date Written: 2011
This paper analyzes the presence of financial constraints for investment in innovation in Brazil. Dynamic investment models are estimated for a panel dataset of 206 Brazilian nonfinancial firms in the period 1995-2006. Results show that innovation of Brazilian firms is subject to financial constraints in line with previous international evidence. Innovation of Brazilian firms is adversely affected by leverage and also depends on internally generated funds. The models presented incorporate relevant firm characteristics for financial constraints. Our findings suggest the need for further advances at micro and macroeconomic levels in Brazil to mitigate the observed financial constraints.
Keywords: innovation, investment in innovation, financial constraints, Brazil
JEL Classification: G31, G32, O31, D92
Suggested Citation: Suggested Citation