THE INFLUENCE OF PRODUCT AND PROCESS INNOVATION OVER THE PERFORMANCE OF BRAZILIAN COMPANIES

Abstract

The main objective of this research was to evaluate the relationship between performance of product innovations (processes) and growth (profitability) of Brazilian companies from three sectors: manufacturing of machinery and equipment; manufacturing of chemical products and manufacturing of computing equipment, electronic and optical products. We used research data of PINTEC (2003, 2005 and 2008) and PIA (2003-2010) collected at the Brazilian Institute of Geography and Statistics - IBGE. We verified, based on results of multiple regression and statistical analysis, the absence of a positive relationship between the performance of process innovation (product) and profitability (growth). To some extent it was expected that innovations do not provide a high level of explanation for the variance in financial performance of companies considering that there are other factors that help explain this variance (market attractiveness, dominance of input sources, to name just two examples). It was noticed that the literature examined is also inconclusive on the relationship between innovation and financial performance. These contradictory results are mainly due to the diversity of variables used to measure both financial performance and innovation performance. Besides the rejection of the research hypotheses, the study revealed other relevant findings that can support the manager in the decision making process related to the innovation process.