Determinants of Innovation Activity of Small and Medium Sized Enterprises in Small Post-Soviet Countries

Abstract

This paper aims to study the determinants of innovation activity of small and medium-sized enterprises in five small post-Soviet countries. Empirical analysis is based on the data from the fifth wave of the Business Environment and Enterprise Performance Survey. Innovation of SMEs is measured with five innovation practices. For each aspect of innovation probit model is applied. Estimation results shows that experience of managers has curvilinear effect on the innovation in SMEs. Moreover, foreign participation, export orientation and competitiveness in sectors are indicated as important condition for innovation by SMEs. Competition forces firms to innovate in order to survive, while openness of the economy provides with exporting opportunities and participation of the foreign capital. Especially the latter factor may significantly reduce costs of innovation through technological transformation from abroad.

Exploring the impact of 4IR on skills and personal qualities for future accountants: a proposed conceptual framework for university accounting education

“…The unexpected global pandemic crisis has created serious disruptions in the working patterns across the economy (Blum & Neumärker, 2020;Karabag, 2020). The COVID-19 pandemic has seen entire industry sectors take a downturn with redundancies and restructuring becoming the worldwide norm.…”

Innovation and economic crisis in transition economies

“…Moreover, a firm is foreign owned if the foreign shareholder holds more than 50%. Gorodnichenko and Schnitzer (2013) and Karymshakova et al (2019) found that foreign-owned companies innovate more in transition countries than local firms. As foreign competition and exporting status can have an impact on firm behavior (Beneito et al, 2015;Gorodnichenko et al, 2009;Mateut, 2018;Molodchik et al, 2021) we include export defined as 1/0 if the company is doing export business.…”

Impact of Elements of Finance and Business Support on the SME Business Ecosystem in South Africa: An Econometric Analysis

“…The availability of financial resources is one of the most significant and frequent factors impeding SME performance and innovation [27][28][29][30][31][32][33][34][35][36][37]. For instance, [38] based on their study on manufacturing SMEs in India, supported the significance of access to finance for SMEs by concluding that internal and institutional finance has a favorable impact on firm performance.…”

“…A study conducted in Kenya on a sample of 760 SMEs [47] indicated that the different sources of capital for SMEs consist of 46.1% personal savings, 19.1% microfinance institutions, 18.2% friends and relatives, 14.8% loans from banks, and 1.8% Chamas (informal investment or savings cooperatives). The differences in funding between countries be-come clear if these percentages in Kenya are compared to the study of [33] on a sample of 1081 SMEs in 5 small post-Soviet countries. Karymshakov et al indicated that 0.37% of the SMEs were shareholding companies with shares traded in the stock market, 91.58% were shareholding companies with non-traded shares or shares traded privately, and 5.74% were sole proprietors.…”

“…Karymshakov et al indicated that 0.37% of the SMEs were shareholding companies with shares traded in the stock market, 91.58% were shareholding companies with non-traded shares or shares traded privately, and 5.74% were sole proprietors. The companies selling shares on the stock markets, were found by [33] to be more innovative, as they introduced new goods and services, implemented new production processes, and had new market strategies.…”