FINANCIAL SLACK AND BUSINESS INNOVATION IN BRAZIL

Abstract

This research analyzes the influence of financial slack on the level of investments in business innovation in Brazil between 2010 and 2014. The positioning of this research seeks to contribute to a better understanding of the controversial relationship between the strategy based on financial slack and capital expenditure with innovation resources, by exploratory model. The sample comprises the 100 largest non-financial companies listed in the Sao Paulo Stock Exchange. The innovation investments were taken by disclosure of the explicative notes and management reports between the years 2011 to 2014. The financial slack was stratified into available, recoverable and potential. The data were constructed from the Financial Reports from 2010 to 2013. The regression analysis was performed using balanced panel data with the weighted least squares technique. The results show that the available financial slack has a significant impact on investments in innovation and the recoverable financial slack partially, only the slack with marketing influence investments in innovation. The evaluation of the empirical model brings new evidence for the theme, especially for the Brazilian reality.