The impact of state aid on the firms' innovation performance: an international comparative study

Abstract

The research seeks to determine the impact of state aid on the innovation performance firms' within the "visegrad" (V4) member countries. This is due to the recent role firms' (SME) play in the development of every economy, thus influencing the need to determine how the government of the V4 member state support SME to attain their goals and objectives. The study first of all began with the literature review on innovation performance by reviewing the concept of innovation performance, determinants of innovation, corporation for innovation, policies that support innovation performance, brief meaning of state aid, financing of SME and funds available for financing as well as the effectiveness of the funds. The second part of the study demonstrates literature on the concept of state aid, importance to firms, policies of state aid, state aid structure, and instrument of state aid. In the third part the methodology for the research was developed and hypothesis created and assessed. In the fourth part analysis was conducted and it was noted that state financial aid has a significant influence on SME patent count and product innovation performance within the V4 member countries. Interestingly, the discussion it would be realized that other researcher in their study identified an insignificant relationship between state financial aid and SME innovation performance. However, the study concludes that state financial aid has a significant influence on SME innovation performance in the V4 member state.