Technological capability and firm performance

Abstract

This research aims to investigate the relationship between investments in technological capability and economic performance in Brazilian firms. Based on economic development theory and on developed countries history, it is assumed that this relationship is positive. Through key indicators, 133 Brazilian firms have been analyzed. Given the economic circumstances of an emerging economy, which the majority of businesses are primarily based on low and medium-lowtechnology industries, it is not possible to affirm the existence of a positive relation between technological capability and firm performance. There are other elements that allow firms to achieve such results. Firms of lower technological intensity industries performed above average in the economic performance indicators, adversely, they invested below average in technological capability. These findings do not diminish the merit of firms’ and country’s success. They in fact confirm a historical tradition of a country that concentrates its efforts on basic industries.