Investment and Expenditure on Innovation Activities and Innovative Capability: Empirical Evidence from Portuguese Services Firms and KIBS

Abstract

This research aims to analyze the degree of importance of investment and expenditure on innovation activities for entrepreneurial innovative capability, in the scope of Portuguese services firms and the firms belonging to the KIBS - knowledge-intensive business services. A conceptual model was proposed and several research hypotheses were empirically tested using secondary data, belonging to the 5th CIS 2006, supervised by EUROSTAT. A data set from 829 KIBS firms was studied. The method used will be the logistic regression model. According to the results obtained, the greater the financial investment in acquisition of machinery, equipment and software, in internal research and development, in acquisition of external knowledge, in marketing activities and other procedures, the greater the propensity for firms to innovate in terms of services. This study highlights the contributions that innovation activities can provide in what regards the development of innovation process, giving special emphasis to their service innovation.