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Technological Innovation And Productivity In Late-Transition Estonia: Econometric Evidence From Innovation Surveys

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  • Jaan Masso
  • Priit Vahter

Abstract

There is growing interest in modelling the relationship between innovation and productivity in developing and transition econo¬mies due to their attempts to establish knowledge-based economies and to increase business R&D. Our paper investigates whether there is a signi¬ficant relationship between technological innovation and pro¬ductivity in the manufacturing sector of Estonia. We use firm-level data for the analysis from two waves of Community Innovation Surveys (CIS3 and CIS4) from 1998–2000 and 2002–2004, which is then combined with financial data about firms from the Estonian Business Register in order to study the effect of innovation at higher leads. We apply a structural model that in¬volves a system of equations on innovation expenditure, inno¬vation outcome and productivity. Our results show that during 1998–2000 only product innovation increased productivity, while in 2002–2004 only process innovation had a positive effect on productivity. This can probably be explained by the different macroeconomic conditions in the two periods.

Suggested Citation

  • Jaan Masso & Priit Vahter, 2008. "Technological Innovation And Productivity In Late-Transition Estonia: Econometric Evidence From Innovation Surveys," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 61, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  • Handle: RePEc:mtk:febawb:61
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    References listed on IDEAS

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    More about this item

    Keywords

    productivity; innovation; Estonia;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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