Effect of R&D intensity on the innovative performance of manufacturing companies. Evidence from Ecuador, Peru and Chile

Abstract

Purpose This paper aims to examine the relationship between research and development (R&D) intensity and innovative performance and R&D intensity as a moderating variable in the relationship between sources of information and innovative performance. Design/methodology/approach This is a quantitative, nonexperimental, cross-sectional study of the data collected from national surveys of innovation activities from Ecuador, Peru and Chile where the investigation was carried out. A bivariate probit regression was applied. Findings The results of the investigation pinpoint that R&D intensity is positively related to the innovation of products and processes in Ecuador and Peru. However, no relationship was found in Chile. As a moderating variable of the information sources (customers, suppliers and competitors), and the innovation of products and processes, it shows different results in the three countries examined. Research limitations/implications This study contributes to the literature with evidence in countries with low rates of investment in R&D in the countries examined, this relationship does not always exist; this relationship is considered to be dependent on the complexity of the knowledge and internal capabilities of the company required to achieve innovation, and this complexity could vary according to the type of manufacturing and technology level of the companies. Thus, in manufacturing companies of less complexity to achieve the necessary knowledge for innovation, low rates of investment in R&D are sufficient for the relationship to exist. Practical implications By increasing their R&D intensity, companies acquire technology and develop internal skills and capabilities that boost their innovative potential. Nevertheless, it is not enough to increase R&D intensity to take advantage of external sources of information, it is also necessary to boost the absorptive capacity to assimilate and take advantage of external knowledge. Originality/value This study contributes to the scarce evidence that exists, on the literature in developing countries, on the effect of R&D intensity on innovative performance and provides evidence of R&D intensity as a moderating variable of the relationship between sources of information and innovative performance.

Impact of internal factors on product innovation: Empirical Evidence from Vietnamese textile and garment firms

“…New technological knowledge allows a company to think about innovating its processes and operating habits, thereby recognizing new opportunities for innovation. Recent research conducted by Carvache-Franco, et al [19] provides new insights into the relationship between research and development (R&D) intensity and product and process innovation. The study found a positive association between R&D intensity and innovation in both products and processes in Ecuador and Peru.…”

Relationship between market and institutional networks and technological innovation: an analysis of peruvian manufacturing firms

“…Thus, López-Mendoza & Mauricio (2020) analyzed how universities seek to interact with firms to carry out technology transfer projects, allowing them to improve the satisfaction of the firm's customers, by receiving better products. While Carvache-Franco et al (2020), analyzing Peruvian firms, found a contradictory result, that is, firms that interact with their consultants are less likely to develop product innovations.…”

“…With regard to Peruvian firms, it is important to point out that universities are generators of technological knowledge that helps firms develop innovations (Arenas & González, 2019). While Carvache-Franco et al (2020) analyzing Peruvian firms found a contradictory result, that is, firms that interact with their consultants are less likely to develop process innovations.…”

The role of market competition for knowledge competencies, R&D and innovation: an empirical analysis for German firms

“…A good number of literature suggests that R&D intensity is another important indicator for firms' innovation activities (see Roper and Hewitt-Dundas, 2015;Carvache-Franco et al, 2020;Zhu et al, 2021). Taking this into account, knowledge intensive firms invest a relatively high proportion of revenues into R&D. As a result, firms' knowledge competencies increase in response to such kind of investment.…”

“…A good number of literature suggests that R&D intensity is another important indicator for firms' innovation activities (see Roper and Hewitt-Dundas, 2015; Carvache-Franco et al. , 2020; Zhu et al.…”