Institutional reforms in the countries of Central Eastern and South Eastern Europe (CESEE) brought about a redefinition of the role of the state, the market and the business sector. We assess the effects of various dimensions of the institutional environment on the labour productivity of manufacturing firms in selected CESEE countries by employing a multilevel model. Our findings reveal that the curbing of corruption and the provision of inter-industrial externalities through the development of a commercial and professional infrastructure have beneficial effects on firm productivity. At the same time, a stricter political and legal framework and the provision of R&D infrastructure have an adverse effect. Such a finding is typical for producers of standardised products in countries with low levels of legal framework development for which R&D and legal adjustments incur cost disadvantages. The implication is that institutional development should be accompanied by a strengthening of firms’ absorptive capacity in order for businesses to benefit from such changes

The goal of this paper was to research and apply the concept of Regional Innovation Systems (RIS) to Croatian regions and to identify particular strengths supporting innovation diffusion as a source of regional competitiveness. A system of indicators is envisaged, with the choice of RIS dimensions and indicators largely relying on Evangelista, Iammarino, Mastrostefano, and Silvani (2001). In total, 32 relevant regional indicators are grouped into three dimensions -Knowledge creation and dissemination, Firm innovation activity and Systems' performance. Regional heterogeneity is noted with respect to innovation capacities in the 2006-2010 period: North-West Croatia is leading in the diffusion of innovation, with overall RIS configuration most conducive to innovation activity; Central and East Croatia (CEC) has a distinct value chain in agriculture and low-technology industries and industries' needs for technological upgrading are resolved through external R&D (acquisition of licenses, patents and know-how), backed up by strong public financing; Adriatic Croatia is underperforming in innovation activity, given the advantages it has over CEC in important elements of systemic dimensions such as entrepreneurial and technological infrastructure and in scientific capacities. Policy implications are drawn from highlighted regional differences in innovation capacities and in sectoral structures.

The objective of this paper is to explore the intraregional and interregional relationships between employment of creative individuals in creative industries and the economic growth of Croatian regions. Spatial panel analysis is applied to assess the interregional effects of regional growth as well as interregional and intraregional effects of cultural and creative industries on economic growth in 2006-2012. While there is empirical evidence of positive interregional economic growth effects, the contribution of the creative potential to the growth of Croatian regions is found to be negative. These findings can be explained by overall modest representation of creative industries, particularly in faster growing regions, and the growth impediments imposed on creative industries by Croatian producers that mostly compete in standardized price-competitive segments of the market.

The purpose of this paper is to do research on regional conditions that are most conducive to maximising the positive effects of the implementation of "New industrial policy" (policy based on Smart specialisation strategy) to regional competitiveness in Croatia. Rather than using the standard but fragmented system of counties, this small post-transition economy is first mapped into five regions following the concept of regional innovation systems (RISs

This study explores the perceptions of members of 13 competitiveness clusters in Croatia (CCC) towards clusters’ objectives, processes, setting and performance. Survey data (n=250) were analysed using descriptive statistics, exploratory factor analysis and regression analysis. Results indicate that progress of CCCs is not visible in the observed period and they are lagging behind successful cluster initiatives in the world. The most important reasons for underperformance are related to weaknesses inherited in cluster development framework, poor implementation of activities, inadequate resources for pursuing more ambitious objectives, lack of consensus and weaknesses in strategy formulation. The paper contributes to the literature by evaluating the program of competitiveness clusters for the first time. It examines the factors that contribute to performance of clusters, and compares CCCs with best practices of similar associations in the world. Although this research is based on perceptions of members, it has valuable implications for clusters and policy-makers. In order to strengthen existing clusters, changes in the national framework are needed, while clusters should have more resources at their disposal to reach more ambitious objectives in the future.