Community Innovation Survey Data Research Articles

Productivity impacts of R&D and non-R&D modes of technological change for incumbents and entrants in a catching-up economy

Considering the importance of innovation activities, especially that of young firms, for aggregate productivity growth, the study, using Estonian Community Innovation Survey (CIS) data, compares the productivity implications of R&D, capital accumulation, and innovation output for entrants and incumbents and contrasts the findings to those for Germany, a representative developed economy. First, in contrast to the developed economies, the percentage of innovating firms is much larger than the percentage that invests in R&D, which indicates the prevalence of non-R&D, such as ‘doing, using, and interacting’ (DUI), mode of innovation. Second, contrary to findings for the developed economies, the impact of R&D on productivity for the entrants and incumbents does not differ. However, the impact of innovation output – many of which are a result of DUI mode – on productivity is much higher for the entrants. Third, despite the adverse sectoral composition typical of catching-up economies, Estonian incumbents, who are the primary carriers of ‘scientific and technologically-based innovative’ (STI) activities, are as good as German incumbents in translating R&D into productivity gains. Fourth, while embodied technological change through capital accumulation is found to be more effective than R&D for improving productivity, the effectiveness is higher for R&D performing firms. Our results suggest that certain policy recommendations for spurring productivity growth in developed economies may be unsuitable for catching-up economies.

International, national and sectoral determinants of innovation: evolutionary perspective from the Czech, German, Hungarian and Slovak community innovation survey data

This paper studies the determinants of innovation activities in Central European economies at the firm, sectoral, country and international levels. It focuses on innovation activities in four countries, the Czech Republic, Germany, Hungary, and Slovakia. Our dataset includes data from the three waves (2010, 2012, 2014) of the Community Innovation Survey (CIS), in a total of 58,880 observations, which we combined with 2-digit NACE rev. 2 sectoral variables (Herfindahl index, average values of age, profits, intangible assets, shares of large and medium-sized enterprises). These variables were calculated from 910,731 observations originating from the Amadeus database. We used Heckman and Bivariate Probit estimation procedures to observe the dynamics of new-to-the-market product and process innovation over time and at different levels of the innovation ecosystem. We focused on sectoral variables and found that determinants of innovation activity differed substantially. Our analysis documented the fluctuation of sectoral variables over time, which aligns with evolutionary theories. At the international level, the results suggest a disequilibrium effect of some sectoral variables over time. National innovation systems differ, and individual coefficients are hardly comparable without an innovation input-output context. We provided several recommendations for future research, such as the issue of non-linearity in some identified determinants.

DUI it yourself: Innovation and activities to promote learning by doing, using, and interacting within the firm

ABSTRACT Implicitly or explicitly, much innovation policy treats investments in research and development (R&D) as the main input to innovation. A large body of literature in innovation studies has challenged this, highlighting the role of external sources of innovation and of innovation based on learning by doing, using and interacting (DUI). Nonetheless, there has been limited empirical research on how firm-internal activities to promote DUI affect innovation, and on how important such activities are relative to internal R&D and to external sources of knowledge. We also know little about how internal DUI activities interact with internal R&D and with external knowledge sourcing. We address these gaps using Norwegian Community Innovation Survey data from 2010. We find that internal DUI is an important driver of new-to-market product innovation. Further, the results show partial substitution effects between internal DUI and internal R&D, as well as between internal DUI and external DUI.

Determining factors for U-I cooperation: a European study

PurposeCompanies need to innovate to remain in the market and be competitive. Thus, success will depend on your internal resources and the external sources of knowledge used. The cooperation between univerity and industry (U–I) allows companies to access resources that, in general, they do not have, allowing them to achieve innovation, competitive advantages, and competitiveness. The purpose of this study is to understand the determinants that influence U–I cooperation in creating knowledge and innovation.Design/methodology/approachThis study analyzes the determinants considered essential for companies to establish cooperation processes with universities. The research uses the last community innovation survey data set, data from 14 countries, and 28,743 observations. The method uses logistic regression.FindingsThe results confirm that the company's size, the innovative capacities associated with R&D, exportation and public funds are essential and significant determinants for the cooperation with universities. On the other hand, the acquisition of machinery and training programs are not a critical factor in establishing cooperation with universities that are not in the same country. The analysis considered companies cooperation with universities of the same country, from the European Union (EU) or other countries outside EU.Originality/valueIn addition to providing substantial theoretical contributions on the subject, this research also provides more information about the importance of U–I cooperation, allowing to characterize companies interested in developing U–I cooperation.

Evolving appropriability – Variation in the relevance of appropriability mechanisms across industries

Although innovation appropriability has been studied for decades, industry-level variations and development patterns have rarely been the focus of research. Using three waves of Community Innovation Survey data, this paper empirically explores the dynamics in the use of appropriability mechanisms across time and industries. The use of appropriability mechanisms has increased, and preferences have shifted from the moderate use of formal and informal appropriability mechanisms to informal types. In addition, while there are industry differences, generally after a decade, the connections between the mechanisms are more numerous and encompass different forms. Furthermore, a necessary condition analysis (NCA) reveals differences between industries on the necessity of varying appropriability mechanisms for innovation cooperation. While ineffectiveness of intellectual property rights (IPRs) and secrecy can be compensated with other appropriability mechanisms in practically any industry, there are industries where lead time and complexity are determinants of innovation cooperation and cannot be substituted or compensated for. These insights into industry-specific patterns unveil innovation appropriability in various contexts and assist managers in resisting the dominant logics in their industry when pursuing appropriation in collaborative and converging environments.

Openness strategies and the success of international entrepreneurship

PurposeExternal knowledge is a key resource for the success and the survival of born global firms; however, existing models provide minimal evidence on how these firms should source this knowledge resource. Thus, the purpose of this research is to increase understanding on the impact of diverse knowledge search and knowledge formal protection in international new ventures (INVs).Design/methodology/approachThe study uses a quantitative methodology based on a sample of start-ups from the Spanish Community Innovation Survey data. Using ordinary least squares regressions on a 10-year period panel data, this research tests the moderator role of a heterogeneous base of international partners and formal knowledge appropriation strategy on the relationship between start-ups and their export performance.FindingsThe results show that compared to non-born global start-ups, born global firms benefit more from establishing relationships with a set of heterogeneous international partners. By contrast, all start-ups benefit from an extensive appropriation strategy if they establish such alliances with diverse international partners.Originality/valueThe study extends current theory on international entrepreneurship by providing a new theoretical framework for INVs of both the extensive use of formal mechanisms of knowledge protection and the access to heterogeneous and distant knowledge. This study has also several implications for knowledge management domain.

Eco-Innovation and Emissions Trading: a sector analysis for European countries

This article aims to assess the impact of a specific regulation, namely the European Union emission trading system (EU-ETS), on the Eco-Innovation (EI) activities of the companies, to assess its effectiveness in changing the companies’ environmental behavior. It also intendsto empirically examine whether the EU-ETS and its ‘stringency’ are significantly related to EI, taking into account both the internal and external factors that might be correlated with EI. To this end, we develop a cross-sectional framework using the Community Innovation Survey (CIS) data and by creating a stringency indicator for the period between 2012-2014 for 13 European countries. We found that the EU-ETS has limited and some controversial effects. Furthermore, technology policies emerge as an important element of the policy mix complementing climate policy. Based on our findings, we make recommendations for policymakers on how to improve the existing policy mix.

Cooperation for innovation: more is not necessarily merrier

PurposeEmbracing a large set of innovation objectives and collaborating with diverse partners have been promoted as a means to improve innovation performance. However, empirical evidence on the relationships between breadth of objectives, breadth of cooperation and innovation performance is limited, particularly in the context of emerging economies. A larger number of objectives and cooperation partners inevitably increases the complexity in organizational alignment, and cooperation eventually leads to diminishing returns. This study adds to the debate on the costs and benefits of cooperation for innovation. Understanding the optimal levels of the breadth of objectives and cooperation supports managerial decision-making and productivity in the practice of cooperation for innovation.Design/methodology/approachOperationalizing breadth of innovation objectives and cooperation via the Turkish Community Innovation Survey data, self-reports reflecting 5,863 firm-level responses between 2006 and 2008 are analysed using tobit and probit models. The maximum likelihood estimator is used to find the optimal levels for breadth of objectives and cooperation.FindingsFirms with greater breadth of innovation objectives experience higher innovation performance; those with greater breadth of cooperation also experience higher innovation performance, but our results indicate the existence of optimal levels of breadth for both innovation objectives and cooperation.Research limitations/implicationsThe authors extend the logic that there is no safety in numbers in cooperation for innovation. If the aim is to enhance innovation performance, managers and policymakers need to pay attention to the number of innovation objectives and the amount of cooperation pursued by firms. However, innovation success may be closely associated with a firm's dynamic capabilities and ability to mobilize its resources. Drawing on organizational learning theories, future research could explore why a lower than maximum level of cooperation may be more conducive to reaching levels of enhanced innovation performance and whether this level is influenced by cognitive processes.Originality/valueThe authors draw attention to the ideal number of innovation objectives and number of cooperating partners required to enhance innovation performance, thus contributing to the debate on the complex relationships between innovation, performance and cooperation in the unique setting of a large developing economy.

What drives university-industry collaboration? Research excellence or firm collaboration strategy?

Research and innovation policy aims to boost research output and university-industry collaboration (UIC) in part to allow firms access to leading scientific knowledge. As part of their mission, universities in many countries are expected to contribute to innovation in their regions. However, the relationship between research output and UIC is unclear: research-intensive universities can produce frontier research, which is attractive to firms, but may simultaneously suffer from a gap between the research produced and the needs of local firms, as well as mission overload. This may hinder local firms’ ability to cooperate with universities altogether or force them to look beyond the region for other suitable universities to interact with. This paper investigates the relationship between the research output of local universities and firms’ participation in UICs across different geographical scales. It uses Community Innovation Survey (CIS) data for Norwegian firms and Scopus data on Norwegian universities’ research output across various disciplines. The results demonstrate that local university research intensity and quality are negatively associated with firm participation in UICs at the local level. Firm characteristics, in particular the firm's general strategy towards cooperation and its geography, turn out to be much more important than university characteristics in explaining UICs. Notably, firms’ cooperation with other external partners at the same scale is a strong predictor of UICs.

Prospects for innovation performance on European level

Abstract In 2004, the European Commission implemented the Decision No 1608/2003/EC of the European Parliament and of the Council concerning the production and development of Community statistics on innovation. This triggered the awareness of the role of innovation and R&D on national and European level and thus the opportunity to step towards in-depth monitoring innovation performance through various indicators. The paper aims to investigate the trends in the selected innovation indicators (i.e., public funding, expenditures and innovation activities, types of innovation and products introduced, hampered innovation activities) to outline the development direction on the enterprise level using the Community innovation survey data for the 2002–2016 period. Using the basic time series analysis, the paper evaluates the progress according to the European Strategy on research and innovation. Furthermore, using the autocorrelation and autoregression methods, the paper also outlines the future direction in innovation performance on European level.

Why firms stop introducing innovations in the great recession: aggregate demand, financial constraints and risk

PurposeWith Spanish Community Innovation Survey data, this paper tests two main hypotheses as explanation of the fall in business innovation output in the Great Recession: the aggregate demand effect (firms have lower propensity to initiate innovation projects in recession than in contraction from demand-pull and profit expectations effects) and the risk effect (a greater proportion of the initiated projects fail in recessions than in expansions).Design/methodology/approachThe research methodology consists on first modelling the decision by firms to initiate innovation projects in t or not (probit model), and, second, modelling the outcomes, success or failure in t + 1 of firms that decide to initiate (Heckman model).FindingsThe empirical results support the two hypotheses. They also indicate that the sensitivity of the decision to initiate innovation projects to the aggregate demand is more pronounced among financially constrained firms than among unconstrained ones, while the risk effect appears to be independent of the financial situation of firms.Research limitations/implicationsThe results of the research are limited by not being able to follow up individual innovation projects, and by not having available a more representative sample of firms where non-innovators and potential innovators are represented (now is biased toward potential innovators).Practical implicationsThe results highlight the importance of macroeconomic stability for sustained business innovation output over time and calls managers’ attention in better management of innovation risk.Social implicationsThe results of the paper recommend macroeconomic polies aimed at the stabilization of aggregate demand and smoothing the business cycle, as a way to contribute to the stabilization of the growth of innovation output over time. Monetary and fiscal policies that smooth the business cycle will then have significant effects in the stabilization of innovation output and, in turn, in the reduction of volatility of economic growth over time. Increasing the direct public financial aid to undertake innovation projects in recession periods will not have the same innovation output stabilization effect than the stabilization of the aggregate demand. The reason is that, as the paper points out, the innovation output of financially unconstrained firms is also affected negatively by the contraction of aggregate demand in recession periods.Originality/valueThis paper is the first one to investigate the differences in business innovation outputs in expansions and recessions, separating the aggregate demand and the risk effect that the organisation for economic co-operation and development identifies as main determinants of the fall in innovation output during the Great Recession. The decomposition of firms’ innovation output in the decision to initiate innovation projects and the likelihood that those initiated succeed is also new in the literature.

Four types of eco-innovation for Baltic firms

Using the Community Innovation Survey data, in this paper we explore the external and internal drivers influencing the four types of eco-innovation in the Baltic manufacturing sector. For this purpose, we estimate a quadrivariate probit model to reveal potential complementarities across the four types of eco-innovation and identify the differences among sectors and countries. The empirical findings show that: i) some factors such as future eco-policies and voluntary actions are significant for most categories eco-innovation; ii) cost saving is the main driver for the eco-process; iii) government grants, subsidies or other financial incentives and current regulation are never significant and finally iv) cooperation is a crucial driving factor for the productive process.

PRODUCTIVITY IMPLICATIONS OF R&D, INNOVATION AND CAPITAL ACCUMULATION FOR INCUMBENTS AND ENTRANTS: THE CASE OF ESTONIA

In this paper, using Estonian Community Innovation Survey data, we study the role of R&D, capital accumulation, and innovation output on productivity for entrants and incumbents. We find that the impact of R&D investment on labour productivity is larger for the entrants com- pared to the incumbents. Entrants are found to be more productive and more heterogeneous in their total factor productivity (TFP) than the incumbents. Moreover, entrants who innovate are on average, in terms of TFP, 25% more productive than the entrants who do not, while the corresponding figure for the incumbents is 7%. In addition, it is mostly the incumbents who benefit from within-industry knowledge that is produced outside their own firm. Finally, for both entrants and incumbents, embodied technological change through capital accumulation is found to be more effective in generating productivity growth than R&D expenditure.

What drives the delegation of innovation decisions? The roles of firm innovation strategy and the nature of external knowledge

We study what determines delegation of authority over innovation decisions in firms. Extant research that addresses this topic in an open innovation context, suggests that firms that engage in open innovation tend to delegate authority over innovation decisions. We provide a more nuanced argument that considers important contingencies. Thus, we argue that the extent of delegation depends upon the combined effect of the relative importance of innovation decisions to the firm's strategy and, when a firm engages in open innovation, on the nature of the external knowledge (scientific vs. practical) that it seeks to absorb from the external environment. We test our hypotheses on data from a double-respondent survey of Danish firms that we link to Community Innovation Survey data and to the Danish Integrated Database for Labor Market Research. We provide econometric results that support our hypotheses.

Wearing failure as a path to innovation

Innovation is a widely acknowledged key component of corporate performance management. However, most of the literature on this topic has tended to focus on determinants of corporate failure, thereby neglecting to look at the role of innovation failure in triggering innovative initiatives. By using a sample of companies covered by 2014 Community Innovation Survey data and applying econometric models, this study sought to analyze the impacts of innovative project failure. The results show that innovation failure is negatively correlated with companies’ experience and acquisition of external knowledge. The main findings are consistent with the scarce literature on this research topic, and highlight the positive role that companies’ accumulated experience has in their assimilation of knowledge flows.

Business innovation modes and their impact on innovation outputs: Regional variations and the nature of innovation across EU regions

This work contributes to the literature on innovation systems and, in particular, delivers a thorough analysis on business innovation modes across a range of regional contexts. This analysis refers to the strand of literature on STI (Science and Technology-based Innovation) and DUI innovation modes (Innovation based on learning-by-Doing, learning-by-Using, learning-by-Interacting) that have been intensely debated over the past few years. It is a relevant area of research because it discusses the most effective innovation mode adopted by firms and their regions in the context of increasing global competition. In this scientific area, we inquire whether and how the regional context and its specific technological capabilities produce a differentiated impact of STI and DUI innovation modes on innovation outputs, alongside the nature of innovation outputs. In this respect, this study advances the literature on regional innovation systems that have not been analyzed by other scholarly contributions in this strand who have mostly discussed the differentiated impact of innovation modes across individual countries, industries, and business networks. Based on the large heterogeneity of regions across the European geography, we move beyond the set of individual country studies and develop a thorough analysis based on the Community Innovation Survey (CIS 2014) data from the Eurostat office about EU regions. Empirical evidence based on the application of a multiple treatment model suggests that both regional specificities and the nature of innovation matter. In addition, the DUI innovation mode proves to be often more important than expected for most types of innovation output.

Regional Perspective on R&D Policies for SMEs: Does Success Breed Success?

In this paper, we examine the effects of EU policy schemes that support innovation in small and medium-sized enterprises. Since the effectiveness of innovation schemes can be expected to differ across Europe as entrepreneurship and innovation tend to be more intense in more developed regions, we postulate that the effect of EU instruments on additionality increases with the level of development. We offer a multi-country perspective using two waves of Community Innovation Survey data (CIS 2008 and CIS 2012). We find that the impact of EU funding depends on the level of country’s innovativeness: both national and EU public schemes exhibit smaller additionality in less developed countries, while crowding-out is observed only in recently joined EU members.

Does Technological Innovation Drive Corporate Sustainability? Empirical Evidence for the European Financial Industry in Catching-Up and Central and Eastern Europe Countries

In the financial industry, two relationships are well-researched: (i) innovation and financial performance and, (ii) sustainability and financial performance, both focused primarily on Western and advanced countries. The relationship between innovation and sustainability, however, is underresearched. This study’s purpose consists of determining whether there is a relationship between innovation and corporate sustainability in the financial industry. In doing so, this study responds to a critical question: are the most innovative firms also the most sustainability-oriented? We empirically explore sustainability-oriented innovation in the financial industry of 11 catching-up countries in Central and Eastern Europe (CEE). Using Community Innovation Survey (CIS) data for 2012–2014, this study empirically analyzes a large sample of 1574 firms in the financial industry. Our results suggest that innovation is positively linked to corporate sustainability, pointing out that innovation capabilities are positively related to sustainability. Our study proposes a framework for analyzing innovation and sustainability from a capability-perspective.

Small firms and patenting revisited

In order to observe a patent application at the firm level, two conditions need to be met: new products need to be of patentable quality, which depends both on the degree of novelty of innovations and on the total number (portfolio) of innovations; and the benefits of patents need to be higher than the costs of owning them. Analyzing the patent propensity of small and large UK firms using a novel innovation-level survey (the SIPU survey) linked to Community Innovation Survey data, we find that when we consider the whole innovation portfolio, smaller firms do patent less than larger firms. However, using data on individual innovations, we find that smaller firms are no less likely to patent any specific innovation than larger firms. We argue that size differences in the probability to patent relate primarily to the “portfolio effect,” i.e., larger firms generate more innovations than smaller firms, and therefore are more likely to create one or more which are patentable. As for the decision to patent a patentable innovation, we find that cost barriers, more than issues of innovation quality or enforceability, deter small firms from patenting specific innovations. Measures to address the costs of patenting for smaller—perhaps by considering patents as eligible costs for R&D tax credits—and/or subsidizing SMEs’ participation in IP litigation schemes may both encourage patent use by smaller firms.

Collected worker experiences and the novelty content of innovation

In this paper we investigate whether the novelty content of innovations introduced by Norwegian manufacturing firms reflect the composition of work-life experiences collected by employees. Distinguishing between ‘related’ (RV) and ‘unrelated’ (URV) variety and using employer-employee registers merged with Community Innovation Survey data to observe experiences prior to innovation strategies and results, we find the probability of incremental innovation increasing strongly with RV when firms are located in a large-city region. URV provide additional support for incremental innovation among firms that are not R&D active, and increases more generally the probability of radical (new-to-the world) innovation. However, these relationships flatten out at moderate levels, and the maximum impact of URV on radical innovation is limited compared to the average impact of firms’ R&D efforts. Thus, whereas incremental innovation is highly receptive to related worker experiences when collected and combined in urban contexts, radical innovation depend to a larger degree on the innovation strategies and efforts of the firm itself.