R&D, MARKET STRUCTURE AND ADVERTISING IN BRAZILIAN MANUFACTURING

Gílson G. Silva, Jr., Federal University of Santa Catarina, Brazil

Published in

JOURNAL OF ACADEMY OF BUSINESS AND ECONOMICS
Volume 15, Issue 3, p71-76, October 2015

ABSTRACT

The aim of this paper is analyse empirically R&D, market structure and advertising in Brazilian manufacturing. According to recent literature advertising is part of firms R&D appropriability efforts in a specific market structure. We use Brazilian innovation and Brazilian industrial surveys 2003 and 2005 editions to build a panel data with information at firm level to 9000 companies. Among the main results, the average firm market share (SIC 3 digit) is 0.9%, with standard deviation 3.9% and 75th percentile 1.4% and the average firm advertisement/net revenue ratio is 0.3%, standard deviation 1.2% and 75th percentile also 0.3%. From regression results we conclude that advertising is an efficient appropriability mechanism within R&D initiatives in Brazilian industrial firms and market share affects a firm's R&D decision-making, i.e., market concentration and R&D expenditure are positively correlated in low appropriability conditions sectors.

Keywords

R&D, market structure, advertising, Brazilian manufacturing, microeconometrics


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