How firm size moderates the knowledge and affects the innovation performance? Evidence from Brazilian manufacturing firms

Abstract

Objective: Consists in explore the relationship between firm size and knowledge to capture the firm innovation performance in Brazilian manufacturing industries.

Methodology: Using the production function approach and following the Resource-Based-View – RBV theory, we investigate how the firm internal R&D and the degree of intangible assets are moderated by firm size.

Originality: The literature in the past decades has tried different methods to find strategies that improve the innovation of a large number of firms in different countries and regions. Yet, there is a large number of firms from emerging economies looking forward to improve productivity and the firm innovation performance.

Main results: The results indicated that investment in R&D is relevant to the firm performance. Nonetheless, the relationship between R&D and firm size showed negative results. In the case of the degree of intangible resources, the same was observed, but the interaction between firm size and intangible assets showed positive effects on the firm performance. Finally, other important characteristics were observed, such as firm age and technology intensity, which showed positive influence over the firm performance.

Theoretical contributions: The study showed that the degree of intangible assets is relevant for the firm, as the theory predicts, and it has become valuable for emerging enterprises, once not all firms may conduct R&D activities.

Social contributions: The findings update the understanding about R&D and other intangible assets and provide new information to managers, researchers, and policymakers to develop new policies to promote and finance these activities.