Innovation Processes of SMEs in Less Favoured Municipalities of Portugal

This paper examines the innovation processes of Small and MediumEnterprises (SMEs) in peripheral areas, particularly in the municipality of Guardaand in the islands of Sao Miguel and Santa Maria in the Azores. For this purpose, asurvey was conducted, and three models were estimated: a Logit model, to measurethe difference between firms that innovate and those that do not; a Tobit model,to measure the intensity of innovation; and a Probit model to analyze the type ofinnovation. The results show a positive relationship between the introduction of innovationsin the market sector and the age and activity of the companies, an inverserelationship in regards to the size of the company and in relation to the region.