What determines firms’ innovation in Eastern Europe and Central Asia

Elvin Afandi () and Majid Kermani

Perspectives of Innovation in Economics and Business (PIEB), 2014, vol. 14, issue 1, 1-20

Abstract: By employing a rich sample of firm-level data in seven Eastern Europe and Central Asian countries from Europe and Central Asia, our paper investigates core as well as some specific determinants of firm innovation. We find that the likelihood of engaging in innovation for a firm increases with its core socio-economic characteristics such as size, age, capacity utilization, domestic competition and foreign ownership. In addition to the estimates of these socio-economic covariates, the ultimate purpose of our study is to obtain more in-depth knowledge about the policy implacable factors for firm innovation that the countries could focus on. These policy-related factors are: (i) access to finance, (ii) human capital, and (iii) foreign trade. In this respect, our study finds that firm’s innovation increases with better financial inclusion, greater human capital and engagement in foreign trade. We argue that these analysis and results, coupled with inclusive and targeted policies, can be used to enrich the process of private sector innovation in the region’s countries.

Keywords: Firm innovation; access to finance; human capital; foreign trade (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (1)

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Working Paper: What Determines Firms’ Innovation in Eastern Europe and Central Asia (2013)
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