Innovation Modes and Firm's Performance: Evidence from Portugal

Abstract

It has been shown that firms tend to developdifferentmodesof innovation triggeredby the relationship betweendifferenttypes ofknowledge andlearning processesunderpinning it. Thispaper aims at identifying differentmodes ofbusiness innovation; second, relating them to firms' innovative and economicperformance; and, analyzing the relationship between the different innovation modes and the economic impact of the crisis on the firms' performance. These hypotheses are tested by regression and latent class models for the Portuguese population of firms using a sample of 397 firms, stratifiedby level oftechnological intensity, firm's size andregion. Results show three firms' heterogeneous modes of innovation in termsofits relationship tothe economic and innovative performance and with significant differences in terms of resilience to the economic crisis. These findings lead toa reflection oninnovation, competitiveness and regional policy.