The Effect of R&D Investments and Patents on the Financial Performance of Latin American Firms

This paper investigates the influence of internal R&D and patent applications by Latin American firms on firm performance. Patents should have a positive direct influence on performance. Internal R&D, in turn, should have a positive direct and indirect influence (mediated by patents) as R&am...

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Bibliographic Details
Published inLatin American business review (Binghamton, N.Y.) Vol. 22; no. 1; pp. 33 - 52
Main Authors Paula, Fábio de Oliveira, Silva Rocha, Rodrigo Jorge
Format Journal Article
LanguageEnglish
Published Abingdon Routledge 2021
Taylor & Francis Ltd
Subjects
Companies
Financial performance
innovation performance
Innovations
Latin America
Organizational performance
R&D
Research & development
Latin America
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Summary:This paper investigates the influence of internal R&D and patent applications by Latin American firms on firm performance. Patents should have a positive direct influence on performance. Internal R&D, in turn, should have a positive direct and indirect influence (mediated by patents) as R&D generates innovations regardless of whether they are patented or not. A sample of 751 firms from six Latin American countries showed that when performance is measured by turnover growth, internal R&D has a positive influence and patents have a negative influence. Internal R&D also affects patents, showing a negative indirect influence on performance. The discussions that follow seek to explain these unexpected results.
ISSN:1097-8526
1528-6932
DOI:10.1080/10978526.2020.1761258