Innovation Propensity in Croatian Enterprises: Results of a Community Innovation Survey

Zoran Aralica 1 , Domagoj Račić 2  and Dubravko Radić 3
  • 1 Institute of Economics, Zagreb Trg J. F. Kennedy 7, HR-10000 Zagreb, Croatia
  • 2 Centre for Strategy and Development Kranjčevićeva, 27a, HR - 10000 Zagreb
  • 3 University of Wuppertal Gaußstraße, 20, 42097 Wuppertal

Innovation Propensity in Croatian Enterprises: Results of a Community Innovation Survey

This paper assesses the determinants of innovation activities in Croatian enterprises and their implications for innovation policy. A Type-2 Tobit model is used for modelling the innovation behaviour of Croatian companies, based on the results of a Community Innovation Survey conducted for the period 2001-2003. This model identified the positive effects of conditions for enterprise growth (enterprise size and demand pull variable) and the integration of enterprises into international flows of capital and goods (through foreign direct investments) as well as R&D activities. These variables can be tackled through a more effective policy framework that should increase competitiveness within industries in order to stimulate the demand for innovation. The focus should be on fostering enterprise growth, attraction of FDI with strong spillover effects, and stimulating the export capability of enterprises. Only in such a context can the positive effects of engagement in R&D be maximised.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • Aitken, B.J. and A.E. Harrison, 1999. Do Domestic Firms Benefit from Direct Foreign Investments? Evidence from Venezuela. American Economic Review 89: 605-618.

  • Andrijević-Matovac, V. 2003. Croatian National Innovation System: How to create and transfer knowledge and technology? In Transition Countries in the Knowledge Society, edited by J. Švarc, J. Lažnjak, Ž. Šporer, and D. Polšek, 199-217. The Institute of Social Sciences Ivo Pilar, Zagreb.

  • Aralica, Z. and Bačić, K. 2005. Evaluation of Croatian innovation capability. In Croatian Accession to the European Union, Facing the Challenges of Negotiations, edited by K. Ott, 129-159. The Institute of Public Finance, Zagreb.

  • Arrow, K. J. 1962. The economic implications of learning by doing. Review of Economic Studies 29: 155-173.

  • Arvanitis, S. 1997. The Impact of Firm Size on Innovative Activity - An Empirical

  • Analysis Based on Swiss Firm Data. Small Business Economics 9: 473-490.

  • Baldwin, J. Hanel, P. and Sabourin, D. 2000. Determinants of Innovative Activity in Canadian Manufacturing Firms: The Role of Intellectual Property Rights. Ottawa, Micro-Economic Analysis Division Statistics Canada. http://www.statcan.ca/english/research/11F0019MIE/11F0019MIE2000122.pdf

  • Baumol, J.W. 2004. Entrepreneurial Enterprises, Large Established Firms and Other Components of the Free-Market Growth Machine. Small Business Economics, 23 (1): 9-21.

  • Boia, M. J. Conceição, P. and Santos, R. 2003. Determinants of Innovation in Portugal: Designing, Implementing and Analyzing Evidence from the Third Community Innovation Survey. Instituto Superior Técnico, Lisbon.

  • Božić, Lj. Radas, S. 2005. The Effects of Innovation Activities in SME's in the Republic of Croatia. Privredna kretanja i ekonomska politika 15 (103): 30-50.

  • Caird, S. 1994. How important is the innovator for the commercial success of innovative products in SMEs. Technovation 14 (2): 71-83.

  • CEU 2000. Presidency conclusions: Lisbon European Council 2000. Bruxelles, Council of European Union. http://ue.eu.int/ueDocs/cms_Data/docs/pressData/en/ec/00100-r1.en0.htm

  • Cohen, W. 2005. Empirical Studies of Innovative Activity. In Economics of Innovation and Technological Change Handbook, edited by P. Stoneman, 182-264. Oxford: Blackwell Publishers Ltd.

  • Cohen, W. M., Nelson, R. R. and Walsh, J. P. 2000. Protecting their Intellectual Assets: Appropriability Conditions and Why U.S. Manufacturing Firms Patent (or Not). NBER Working Paper 7552, MS: Cambridge.

  • Cohen W. M. Klepper S 1992. The anatomy ofindustry R&D intensity distributions. American Economic Review 82: 777-799.

  • Cohen, W. and Levinthal, D. 1989. Innovation and learning: The two faces of R&D. Economic Journal 99: 569-596.

  • Crépon, B., Duguet, E. and Mairesse, J. 1998. Research and Development, Innovation and Productivity: An Econometric Analysis at the Firm Level. Economics of Innovation and New Technology 7: 115-158.

  • Crespi, M. 2004. Notes on the Determinants of Innovation: A Multi-perspective Analysis. Rome, FEEM Working Paper No. 42/04. http://papers.ssrn.com/sol3/papers.cfm?abstract_id=524503

  • Damijan, et al. 2003. Technology Transfer through FDI in Top-10 Transition Countries: How Important are Direct Effects, Horizontal and Vertical Spillovers? MI: Ann Arbor, William Davidson Institute working paper, no.549. http://eres.bus.umich.edu/docs/workpap-dav/wp549.pdf

  • Dosi. G. 1988. Sources, Procedures, and Microeconomic Effects of Innovation. Journal of Economic Literature 26: 1120-1171.

  • Geroski, P. A. and Walters, C. F. 1995. Innovative Activities over the Business Cycle. Economic Journal 105: 916-928.

  • Girma, S., Greenaway, D. and Wakelin, K. 2001. Who Benefits from Foreign Direct Investment in the UK? Scottish Journal of Political Economy 48: 119-133.

  • Griffith, R., Huergo, E., Mairesse, J., Peters, B. 2006. Innovation and Productivity Across four European Countries. Oxford Review of Economic Policy 22, 4: 483-498.

  • Griliches, Z. 1990. Patent Statistics as Economic Indicators: A Survey. Journal of Economic Literature 28: 1661-1707.

  • Hausman, A., 2005. Innovativeness among small businesses: Theory and propositions for future research. Industrial Marketing Management 34 (8): 773-782.

  • Hujer, R. and Radić, D. 2003. Evaluating the Impacts of Subsidies on Innovation Activities in Germany. Frankfurt, Discussion Paper, Faculty of Economics and Business Administration Johann Wolfgang Goethe-University. http://much-magic.wiwi.unifrankfurt.de/Professoren/hujer/papers/rd_eva.pdf

  • Jaklič, A., Rojec M. and Damijan, J. 2006. Innovation Cooperation and Innovation Activity of Slovenian Enterprises. Paper presented at 32th Annual Conference of European International Business Association (EIBA): Regional and National Drivers of Business Location and Competitiveness, Fribourg, November.

  • Kickul, J. and Gundry, L. 2002. Prospecting for strategic advantage: the proactive entrepreneurial personality and small firm innovation. Journal of Small Business Management, 40 (2): 85-97.

  • Kuhlmann, S. 2001. Governance of Innovation Policy in Europe - Three Scenarios. In Innovation Policy in Europe and the US: New Policies in New Institutions, Research Policy - Special Issue 30 6: 953-976.

  • Kurik, S. et al. 2002. Innovation in Estonian Enterprises 1998-2000. Estonian Institute for Futures Studies, Talinn.

  • Leiponen, A., 2005. Skill and innovation. International Journal of Industrial Organization 23: 303-323.

  • Lipparini, A. and Sobrero, M., 1994. The glue and the pieces: Entrepreneurship and innovation in small-firm networks. Journal of Business Venturing, 9 (2): 125-40.

  • Lööf, H. Heshmati, A. 2006. On the relationship between innovation and performance: A sensitivity analysis. Economics of Innovation and New Technology 15: 317-344.

  • Lundwall, B.Ä. 1992. National system of innovations: Towards theory of innovation and interactive learning. Printer Publisher, London.

  • Maddala, G. S. 1986. Limited-Dependent and Qualitative Variables in Econometrics. Cambridge University Press, Cambridge.

  • Mairesse, J. and Mohnen, P. 2001. To Be or Not To Be Innovative: An Exercise in Measurement. Cambridge, MS: National Bureau of Economic Research (NBER), Working Papers 8644. http://edocs.ub.unimaas.nl/loader/file.asp?id=243 (accessed September 9, 2007) http://edocs.ub.unimaas.nl/loader/file.asp?id=243

  • Mohnen, P. and Dagenais, M. 2000. Towards an Innovation Intensity Index: The Case of CIS 1 in Denmark and Ireland. Montreal, CIRANO. http://www.cirano.qc.ca/pdf/publication/2000s-20.pdf (accessed January 22, 2007) http://www.cirano.qc.ca/pdf/publication/2000s-20.pdf

  • Mowery, D. C. and Rosenberg, N. 1989. Technology and the Pursuit of Economic Growth. Cambridge University Press, Cambridge.

  • Narula, R. 2003. Understanding the growth of international R&D alliances. In Multinational

  • Enterprises, Innovative Strategies and Systems of Innovation, edited by J. Cantwell and J. Molero, 129-152. Edward Elgar, Cheltenham.

  • NCC 2006. Croatia's Competitiveness Challenge: Annual Report on Croatia Competitiveness 2006. National Competitiveness Council, Zagreb.

  • OECD 1997. The Measurement of Scientific and Technological Activities: Proposed Guidelines for Collecting and Interpreting Technological Innovation Data - Oslo Manual 2nd edition. OECD, Paris.

  • Patel, P. and Pavitt, K. 2005. Patterns of Technological Activity: their Measurement and Interpretation. In Economics of Innovation and Technological Change Handbook, edited by P. Stoneman, 182-264. Oxford Blackwell Publishers Ltd, Oxford.

  • Pavitt, K. 1984. Patterns of Technical Change: Towards Taxonomy and a Theory. Research Policy 13(6): 343-73.

  • Pavitt, K. 1986. Technology, Innovation and Strategic Management. In: Strategic Management Research: A European Perspective, edited by: J. Mc Gee and H. Tomas, 171-190. John Wiley & Sons, New York.

  • Powell, W.W., Grodal, S. 2005. Networks of Innovators. In The Oxford Handbook of Innovation, edited by J. Fegerberg, D.C. Mowery and R.R. Nelson, 56-85. Oxford University Press, Oxford.

  • Račić, D. et al. 2005. Innovation in Croatian Enterprises. The Institute of Economics, Zagreb.

  • Račić, D. and Cvijanović, V. 2005. Privatization, Institution Building and Market Development: The Case of Croatia. In Path-depedent development in the Western Balkans: the impact of privatization, edited by S. Kusic, 43-77. Peter Lang, Frankfurt am Main.

  • Radić, D. 2005. Econometric Analysis of Innovation Activities. Peter Lang, Frankfurt am Main.

  • Radošević, S. 2004. A Two-tier or Multi-tier Europe? Assessing the Innovation Capacities of Central and Eastern European Countries in the Enlarged EU. Journal of Common Market Studies 42(3): 641-666.

  • Radosevic, S. 1999. Patterns of Innovative Activities in Countries of Central and Eastern Europe: An Analysis Based on Comparison of Innovation Surveys. Sussex, SPRU Electronic Working Paper No 35. http://www.sussex.ac.uk/Units/spru/publications/imprint/sewps/sewp35/sewp35.pdf

  • Raymond, W. P. et al. 2006. Persistence of innovation in Dutch manufacturing: Is it spurious? Munich, CESifo Working Paper Series No 1681. http://ssrn.com/abstract=894203

  • Rosenberg, N. 1982. Inside the Black Box: Technology and Economics. Cambridge University Press, Cambridge.

  • Sanna-Randaccio, F., R. Veugelers 2003. Global innovation strategies of MNEs: Implications for host economies. In Multinational Enterprises, Innovative Strategies and Systems of Innovation, edited by J. Cantwell and J. Molero, 14-46. Edward Elgar, Cheltenham.

  • Schmookler, J. 1962. Economic Sources of Inventive Activity. Journal of Economic History XXII (1): 1-20.

  • Szabo, A. 2002. Internationalisation of SMEs: The UNECE Approach. Geneva, UNECE. http://www.unece.org/indust/sme/internat.htm

  • Švarc, J. 2006. Socio-political factors and the failure of innovation policy in Croatia as a country in transition. Research Policy 35 (1): 144-159.

  • Teece, D. J. 1977. Technology Transfer by Multinational Firms: The Resource Cost of Transferring Technological Know-how. Economic Journal 87 (346): 242-261.

  • Teece, D. J. 1986. Profiting from Technological Innovation. Research Policy 15 (6): 285-306.

  • Vinding, A. L. 2002. Absorptive capacity and innovative performance: A human capital approach. In Interorganisational Diffusion and Transformation of Knowledge in the Process of Product Innovation. Ph.D. dissertation, Institut for Erhvervsstudier, Ålborg Universitet.

OPEN ACCESS

Journal + Issues

Search