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

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.