THE INFLUENCE OF R&D DEPARTMENTS ON INNOVATION: THE CASE OF THE AGRICULTURAL EQUIPMENT AND IMPLEMENT INDUSTRY IN BRAZIL DOI:10.5773/rai.v8i1.742

Abstract

This paper relates the existence of a formally structured research and development (R&D) department to the propensity to innovate and the innovation performance of companies in the agricultural equipment and implements industry in Brazil. We tested several hypotheses inspired by institutional theory, which would predict that departments were created principally in response to isomorphic forces in the environment. The results suggest a correlation between company size and the existence of an R&D department. They suggest also that innovation performance depends on how R&D is structured. Companies with formal R&D departments tend to have a larger proportion of new products in relation to total sales. Moreover, our research shows that companies with R&D departments do not necessarily employ a product differentiation strategy. The results are important for understanding the influence of R&D departments on overall business strategy and may have implications for managerial decisions regarding the management of research and development.