Revisiting the Factors Driving Firms' Innovation Performances: the Case of Visegrad Countries

Abstract

This study examines the various factors that drive firms’ innovations in Visegrad countries. For the empirical analysis, we used data from the Eurostat Community Innovation Survey 2012–2014 and the probit regression model. The probit regression analysis finds that the main drivers of innovations in these countries are competing in foreign markets, engaging in innovation activities such as R&D and in-house training activities. We find that engaging in R&D was probable to improve product innovations by 48%, process and organizational innovations by 27% and market innovations by 22%. The study also finds that public subsidies for innovations from local, central and EU sources significantly influenced firm-level innovations. Lastly, innovations in these countries were also significantly and positively stimulated by certain firm characteristics such as size and ownerships. In this respect, policy makers and industry management should consider increasing their investments for research and development and its related activities inter alia to improve innovation performance.