Managing the knowledge for innovation in Eastern European firms: open or closed innovation?

Abstract

PurposeThis study investigates the impact of cooperation with external partners on the intensity of product innovation as well as its commercial success. The focus is on firms located in the Eastern European countries that are seldom a subject of empirical innovation studies. The theoretical framework takes into account that moderate and modest innovator countries, which comprise the sample, have distinct innovation ecosystems relative to advanced economies.Design/methodology/approachThe study uses data from the Business Environment and Enterprise Performance Survey (BEEPS) that was conducted in 2013–2014 and covering the period of the past three years. Product innovation is measured through its intensity (a number of product innovation) and through its commercial success (innovative sales). A set of hypotheses are tested using a negative binomial estimator (for the number of product innovation) and a tobit estimator (for innovative sales) estimated in Stata statistical software.FindingsEmpirical findings show that vertical cooperation has a positive effect on the intensity of innovation activities. In contrast, the authors find no evidence that horizontal cooperation or cooperation with science partners (universities and research centres) increase innovation intensity or its commercial success. Besides vertical cooperation, for a commercial success, it is equally beneficial for firms to use their own innovative ideas. These results taken together suggest that closed innovation and cooperation with customers and suppliers are critical determinants of product innovation in Eastern European firms.Originality/valueThe study contributes to expanding the research on knowledge management and open innovation in less advanced economies.