Barriers as moderators in the innovation process

This article investigates the effect of financial and non-financial barriers on innovativeness. Using microdata from Brazil, it provides a rare detailed empirical investigation of this type in developing countries. The analysis is based on a novel conceptual framework of the moderating role of barriers to innovation. Research and development expenditure and informal methods of intellectual property protection are the innovation determinants least affected by obstacles to innovation. This is in sharp contrast to company size, whose effect appeared quite sensitive to barriers of all kinds. Disembodied and embodied knowledge outsourcing interact differently with different constraints: while the former appeared helpful in working around different types of barriers in low-tech sectors, the latter was more useful in addressing financial constraints in high-tech sectors. Finally, cooperation with other firms was negatively affected by obstacles when firms seek more radical innovations, whereas cooperation with research and education organizations proved attractive for companies facing organizational constraints.