This paper aims at examining the determinants of R&D expenditures in Brazil. We use a new database (from ANPEI) with firm level information on R&D and other technological expenditures from 1994 to 1998, and several econometric techniques. The results show that R&D expenditures follow a random walk and that larger firms spend proportionally less in R&D. The main determinant of R&D seems to be investments in physical capital, which indicates some form of complementarity between the two types of investment. Finally, profitability does not seem to be an important determinant of R&D expenditures in Brazil, suggesting that long-term determinants are more important.
P&D; innovations; ANPEI; productivity