IDEAS home Printed from https://ideas.repec.org/a/prg/jnlpep/v2012y2012i4id436p487-503.html
   My bibliography  Save this article

Determinants of Firm´s Innovation

Author

Listed:
  • Alena Zemplinerová
  • Eva Hromádková

Abstract

The primary aim of the paper is an analysis of the relationships between growth, innovation and subsidies based on a large firm-level data set in the period 2004-2007. The novelty of the approach lies in linking data from financial statements with data from innovation surveys of the Czech Statistical. Innovation activities of firms are modelled as a four stage model (CDM) which allows studying several interrelated questions while controlling for simultaneity and for causality problem. In the first two stages determinants of decision to innovate and consequent innovation investment are separated. In the third stage innovation input (R&D investment) is linked to innovation output, and finally, in the fourth stage it is determined how the productivity of firm is related to its innovation activities. Our analysis proved that innovation input significantly increases innovation output, with increasing firm´s size, however, ceteris paribus, the innovation output is decreasing. This means that bigger firms are less efficient in transforming the innovation input into output. More importantly, our analysis shows that access to subsidies has significant, yet negative influence on innovation output. This result may throw a shadow on the efficiency of supported firms and have some implications for competition policy.

Suggested Citation

  • Alena Zemplinerová & Eva Hromádková, 2012. "Determinants of Firm´s Innovation," Prague Economic Papers, University of Economics, Prague, vol. 2012(4), pages 487-503.
  • Handle: RePEc:prg:jnlpep:v:2012:y:2012:i:4:id:436:p:487-503
    as

    Download full text from publisher

    File URL: http://www.vse.cz/polek/download.php?jnl=pep&pdf=436.pdf
    Download Restriction: free of charge

    File URL: http://www.vse.cz/pep/436
    Download Restriction: free of charge

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. László Halpern & Balázs Muraközy, 2012. "Innovation, productivity and exports: the case of Hungary," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(2), pages 151-173, January.
    2. Acs, Zoltan J & Audretsch, David B, 1988. "Innovation in Large and Small Firms: An Empirical Analysis," American Economic Review, American Economic Association, vol. 78(4), pages 678-690, September.
    3. Hans Lööf & Almas Heshmati, 2003. "The link between firm-level innovation and aggregate productivity growth: a cross-country examination," Research Evaluation, Oxford University Press, vol. 12(2), pages 131-147, August.
    4. Kenneth Arrow, 1962. "Economic Welfare and the Allocation of Resources for Invention," NBER Chapters,in: The Rate and Direction of Inventive Activity: Economic and Social Factors, pages 609-626 National Bureau of Economic Research, Inc.
    5. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press, vol. 22(4), pages 483-498, Winter.
    6. Peters, Bettina & Lööf, Hans & Janz, Norbert, 2003. "Firm Level Innovation and Productivity: Is there a Common Story Across Countries?," ZEW Discussion Papers 03-26, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Loof, Hans & Heshmati, Almas, 2002. "Knowledge capital and performance heterogeneity: : A firm-level innovation study," International Journal of Production Economics, Elsevier, vol. 76(1), pages 61-85, March.
    8. Giovanni Cerulli & Bianca Poti', 2008. "Evaluating the Effect of Public Subsidies on firm R&D activity: an Application to Italy Using the Community Innovation Survey," CERIS Working Paper 200809, Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY -NOW- Research Institute on Sustainable Economic Growth - Moncalieri (TO) ITALY.
    9. Almus, Matthias & Czarnitzki, Dirk, 2003. "The Effects of Public R&D Subsidies on Firms' Innovation Activities: The Case of Eastern Germany," Journal of Business & Economic Statistics, American Statistical Association, vol. 21(2), pages 226-236, April.
    10. Hashi, Iraj & Stojčić, Nebojša, 2013. "The impact of innovation activities on firm performance using a multi-stage model: Evidence from the Community Innovation Survey 4," Research Policy, Elsevier, vol. 42(2), pages 353-366.
    11. Ganna Vakhitova & Tetyana Pavlenko, 2010. "Innovation and Productivity: a Firm Level Study of Ukrainian Manufacturing Sector," Discussion Papers 27, Kyiv School of Economics.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juana Sanchez, 2014. "Innovation Output Choices And Characteristics Of Firms In The U.S," Working Papers 14-42, Center for Economic Studies, U.S. Census Bureau.

    More about this item

    Keywords

    R&D; public subsidies; innovation; competition;

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:prg:jnlpep:v:2012:y:2012:i:4:id:436:p:487-503. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Frantisek Sokolovsky). General contact details of provider: http://edirc.repec.org/data/uevsecz.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.