Innovative Activity in Canadian Food Processing Establishments: the Importance of Engineering Practices

This paper examines the factors contributing to innovative activity in the Canadian food processing sector. The study first focuses on the importance of research and development activity and advanced business practices used by production and engineering departments. Second, it examines the extent to which larger firm size and less competition serve to stimulate competition-the so-called Schumpeterian hypothesis. Third, the effect of the nationality of a firm on innovation is investigated. Finally, industry effects are examined.

The paper finds that business practices are significantly related to the probability that a firm is innovative. This is also the case for R&D. Size effects are significant, particularly for process innovations. Elsewhere, their effect is greatly diminished once business practices are included. Foreign ownership is significant only for process innovations and not for product innovations. Competition matters, more so for product than for process innovations. Establishments in the 'other' food products industry tend to lead when it comes to innovation, whereas fish product plants tend to lag.