Technological innovation among internationality active SMEs in the Czech economy

Abstract

PurposeThis paper aims to examine the impact of human and social capital of CEOs of internationally active small- and medium-sized enterprises (SMEs) in the Czech Republic on their firms’ approach to technological innovation.Design/methodology/approachThe study sample was drawn from data collected from the population of Czech manufacturing firms. The final sample included 153 SMEs that met the criteria for inclusion in the study. The authors employed robust regression analysis to test their specific hypotheses.FindingsThis study found that human capital (in the form of CEOs’ professional background and foreign customer knowledge) and social capital (conceptualized as embeddedness in the international markets) of CEOs in the Czech Republic impacted their firms’ approach to technological innovation. Specifically, firms headed by CEOs with professional background in output functions (R&D and marketing) are more likely to invest in technological innovation. The same was found true for firms led by CEOs who possessed a strong knowledge of international customers and were socially embedded in international markets.Originality/valueThis study makes a twofold contribution to the extant literature. First, it develops and tests the theoretical link between human and social capital and technological innovation among internationally active firms. Second, it highlights factors that positively influence technological innovation in the context of a small Central European economy, a setting that has been generally viewed as unfavorable to such innovation.