Title: Determinants of innovation: evidence from Czech Republic, Poland and Hungary

Authors: Besnik A. Krasniqi, Enver A. Kutllovci

Addresses: Faculty of Business and Law, Staffordshire University, Leek Rd., Stoke on Trent ST4 2DF, UK. ' Faculty of Economics, University of Prishtina, Agim Ramadani St., Fakulteti Ekonomik, Pa numer, Prishtine, 10000, Kosove

Abstract: This paper uses binary choice model to examine the determinants of product and process innovation in three advanced economies in Central Eastern Europe (CEE): Czech Republic, Poland and Hungary. The paper is based on a Business Environment and Enterprise Performance Survey (BEEPS) conducted by European Bank for Reconstruction and Development (EBRD) in 2002 and 2005. Evidence supports Schumpeterian hypothesis that firm size has positive effect while firm age has negative effect on innovation. Foreign ownership, exporting status and organisational flexibility exert positive impact on firm innovation activities. Regarding, external conditions, we find that firms operating in concentrated market and face change in the identity of the main customers are more prone to innovation.

Keywords: innovation determinants; process innovation; product innovation; networking; market structures; transition economies; CEE; central eastern Europe; Czech Republic; Poland; Hungary; firm size; firm age; foreign ownership; export status; organisational flexibility.

DOI: 10.1504/IJTE.2008.022865

International Journal of Technoentrepreneurship, 2008 Vol.1 No.4, pp.378 - 404

Published online: 30 Jan 2009 *

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