This paper intends to characterize the innovation process in Brazilian industry, especially in what is related to the alternatives of external knowledge absorption - through machines and equipment acquisitions - and internally knowledge generation - via research and development spending. By this way, it was identified the determinants of the decisions about each of the alternatives, the level of these investments, the importance of those to innovate, besides the impact of the innovation on the firm performance. Among other evidences, it was verified a larger R&D marginal productivity - in relation to the M&E acquisitions - in the Brazilian industry innovation process.
innovation; R&D; M&E; CDM; productivity
