The role of foreign technologies and R&D in innovation processes within catching-up CEE countries

Abstract

Prior research showed that there is a growing consensus among researchers, which point out a key role of external knowledge sources such as external R&D and technologies in enhancing firms´ innovation. However, firms´ from catching-up Central and Eastern European (CEE) countries have already shown in the past that their innovation models differ from those applied, for example, in Western Europe. This study therefore introduces a novel two-staged model combining artificial neural networks and random forests to reveal the importance of internal and external factors influencing firms´ innovation performance in the case of 3,361 firms from six catching-up CEE countries (Czech Republic, Slovakia, Poland, Estonia, Latvia and Lithuania), by using the World Banks´ Enterprise Survey data from 2019. We confirm the hypothesis that innovators in the catching-up CEE countries depend more on internal knowledge sources and, moreover, that participation in the firms groups represents an important factor of firms´ innovation. Surprisingly, we reject the hypothesis that foreign technologies are a crucial source of external knowledge. This study contributes to the theories of open innovation and absorptive capacity in the context of selected CEE countries and provides several practical implications for firms.

Fostering Czech firms? innovation performance through efficient cooperation

“…The authors confirmed that policy-driven cooperation promotes technology and knowledge transfer (especially between businesses and public sector knowledge organizations). We confirm these findings in the case of countries in Central Europe, whereas cooperating partners from this geographical area are often perceived as such partners who enter into mutual interactions with distrust and are more closed to the surrounding environment (Prokop et al, 2021). In addition, we show that cooperation as a mediating variable is crucial for firms' market orientation and participation in the groups of companies.…”

“…This kind of innovation cooperation is often problematic because firms always choose between knowledge and internal know-how they will share and keep secret and what benefits cooperation with these subjects will bring. This is especially important in the case of countries in Central Europe, where firms face the challenge of absorbing knowledge and technology from external partners, whereas wrong firms' external acquisition strategy could lead to the creation of negative effects on innovation outputs (Prokop et al, 2021). Moreover, public subsidies could crowd out private R&D inputs (crowding-out effect) and decrease firms' outputs (Guo et al, 2016).…”

“…Our results contribute to and help expand the current state of knowledge about the issues related to the innovation processes of firms from "catching-up" countries, specifically the Czech manufacturing firms, and allow us to propose several practical implications, which are listed below. These recommendations can be considered applicable in other European countries, primarily in the countries of Central and Eastern Europe, because these countries have a number of elements in common, such as a lower economic performance compared to Western European countries or the transformation of centrally planned to market economies in the early 1990s (Prokop et al, 2021). As these countries are also called "catching-up" countries, the findings of our study significantly contribute to the "catching-up literature" dealing with the issues of innovation, cooperation, and public financial support in Central and Eastern Europe.…”

“…There is still a discrepancy in the researchers' and practitioners' conclusions regarding the efficiency of the use of public national and European funds in these "catching-up" countries. Moreover, it is still unclear whether innovators from CEE countries rely on internal or external R&D sources and the role played by cooperation with different partners in the innovation processes (Prokop et al, 2021). This situation creates a long-term research gap within the "catching-up litera-ture" dealing with the issues of innovation, cooperation, and public financial support in Central and Eastern European countries.…”

The influence of non-family members in top management teams on research and development investment: Evidence from Chinese family firms

“…Given that most family firms are small and medium-sized enterprises (SMEs) [22], such firms often tend to rely on the non-family members of the TMTs who have expertise in specific fields of technology [23]. The non-family members in the TMTs, which consider as the resource of external R&D and technologies, play an important role in the R&D investment of the family firms [24,25]. However, few of these non-family factors have been considered in the current literature, thereby leading to the inclusive results.…”