Influence of Cooperation and Funding on Innovative Capacity in Manufacturing Firms - Estonia and Lithuania Comparative Case Study

Abstract

The aim of this paper is to determine what the impact of different funding sources and cooperative relationships on innovation activities of manufacturing companies in Lithuania and Estonia is, and makes international com-parisons, respectively. We expect that the impact of selected determinants (by itself) will be weaker than when the determinants act in combination with each other. Revealeation of variables combination with the greatest effect on innovation activities leading to the innovations creation is the second part of the goal. Using survey of innovation activities in enterprises - Community Innovation Survey from 2010-2012 were analyse relationship between % of turnover in new or improved products introduced (new to the market; R&D expenditures depend-ent variable) and selected determinants of innovation activities (cooperation, type of innovation, financing source, enterprise and subsidiaries; independent variables) by using own multiple linear regression models. We confirmed the impact of various financing sources. We conclude that public support achieved the greater effect only if it is well targeted; it is the individual support of the selected type of innovation. Positive effect can be further increased if the cooperation (targeted on creation of innovation) is supported by public funds. Likewise we show that cooperation may have a greater positive effect if it occurs during the formation of a certain innova-tion (and in combination with different entities - typically cooperation within/without universities). An important implication arising from these results is that public policies to encourage the innovations creation should to be selective, should to be directed to selected sector and cooperation in the creation of a specific innovation have to be the aim. In this case, it is possible to record even the existence of knowledge spill-over effects mostly in knowledge networks.