Determinants of Firm's Innovation

Abstract

Abstract:The primary aim of the paper is an analysis of the relationships between growth, innovation and subsidies based on a large fi rm-level data set in the period [2004][2005][2006][2007]. The novelty of the approach lies in linking data from fi nancial statements with data from innovation surveys of the Czech Statistical. Innovation activities of fi rms are modelled as a four stage model (CDM) which allows studying several interrelated questions while controlling for simultaneity and for causality problem. In the fi rst 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 fi nally, in the fourth stage it is determined how the productivity of fi rm is related to its innovation activities.Our analysis proved that innovation input signifi cantly increases innovation output, with increasing fi rm´s size, however, ceteris paribus, the innovation output is decreasing. This means that bigger fi rms are less effi cient in transforming the innovation input into output. More importantly, our analysis shows that access to subsidies has signifi cant, yet negative infl uence on innovation output. This result may throw a shadow on the effi ciency of supported fi rms and have some implications for competition policy.

Inovasi, Pertumbuhan, Ukuran Dan Nilai Perusahaan Farmasi Di Indonesia

“…Sujono (2010) menjelaskan bahwa kemampuan perusahaan untuk melakukan inovasi ditentukan oleh struktur kepemilikan, ketersediaan sumberdaya dan ukuran perusahaan. Faktor usia (age), ukuran (size), strategic features, hambatan inovasi keuangan, tingkat persaingan pasar, situasi ekonomi negara dan subsidi Research and Development juga menjadi faktor penentu inovasi (Zemplinerová and Hromádková, 2012).…”

Leadership and innovations in small and medium enterprises

“…Indeed, in concurrence, in their study, Zemplinerová and Hromádková (2012) identified similar types of innovation; product, marketing, process, and organization innovation; with the most prevalent or common type of innovation being process, followed product, then organizational, and finally, marketing innovation. The findings implied that most SMEs would be more likely to change processes, come up with new products, or change organizational aspects in their endeavor to be innovative.…”

“…Government policies and activities are also major determinants of the innovativeness of SMEs. According to Zemplinerová and Hromádková (2012) government funding, subsidies, and other similar activities could motivate firms to be innovative, and the absence of such incentives, subsidies or similar measures may impede the innovativeness of SMEs. Indeed, Zemplinerová and Hromádková (2012 p.490) observed that public subsidy thus mitigates high, uninsurable risk of decisions to innovate.…”

Determinants of European Firm's Innovation and the Role of Public Financial Support

“…There are several factors influencing the outcome of the innovation process. Zemplinerová, Hromádková (2012) mention the firm's age, the firm´s size, and strategic features such as being a member of a group, orientation on foreign markets, barriers to innovation financing, level of market competition, economic situation of the country, R&D subsidies etc. Vieites and Calvo (2011) identified as determinants of business innovation human resources, and other organizational factors related to research and development (centralization, specialization etc.…”

“…Public support for private innovation is often provided by government in the form of significant public subsidies to R&D. The aim is to promote and stimulate innovation activities of firms and subsequently the economic growth. It is argued that because companies have problems to appropriate benefits associated with innovation, private firms invest in R&D innovation less than would be socially desirable and public subsidy thus reduces high and uninsurable risk of the decision to innovate (Zemplinerová, Hromádková, 2012). There are several empirical studies that confirm that external financial support has a significantly positive effect on firm's innovation activities and performance.…”