Community Innovation Survey Research Articles

Empirical Determinants of Innovation in European Countries: Firm-level Analysis Based on CIS 2018

This study examines the role of perceptions about environmental regulations and their influence on the innovative performance and productivity of firms in Germany, Southern Europe, and Central and Eastern Europe. Utilizing the CDM model for innovative performance and data stemming from the Community Innovation Survey (CIS), we explore the alignment with the Porter hypothesis, which posits that well-designed environmental regulations can stimulate technological innovation and enhance market competitiveness. Our findings present a mixed view: in Germany, positive perceptions about environmental regulations correlate with the initiation of innovation activities, contributing to an increase in labour productivity. This supports the Porter hypothesis, evidencing that regulations can lead to beneficial ‘innovation offsets’ such as reduced resource use and pollution. Conversely, in Southern Europe and Central and Eastern Europe, the perceptions about these regulations on innovation activities are insignificant, with no considerable correlation observed between perceptions about environmental regulations and innovation output. Our findings are crucial for policymakers, environmental regulators, and business leaders aiming to leverage environmental regulations to boost innovation and competitiveness within their regions.

The effects of environmental innovations on labor productivity: how does it pay to be green

ABSTRACT Due to growing environmental concerns, environmental innovations (EIs) have gained prominence in firms’ strategies. This study delves into the productivity effects of regulation-driven environmental innovations using data from four Finnish Community Innovation Survey (CIS) waves. Instrumental variable estimation controls for the endogeneity of voluntary and regulation-driven EIs in a novel way. Our results support the prior findings on the strong Porter hypothesis that environmental regulation improves performance. However, the results also hint at a delay before environmental innovations translate into higher productivity. We also find that regulation-driven EIs improve performance in services. Small firms do not benefit relatively less, although they are inclined to do fewer voluntary EIs. Environmental regulation may favor firms in the Nordic context due to firms being close to the industry frontier.

Coopetitive service innovation: the role of geographical proximity, innovation focus and customer cooperation

PurposePrevious research on the impact of coopetition on innovation performance has provided contradictory results. Thus, this study aims to fill the gap by gathering data to explain the impact of coopetition on service innovation, considering the partners’ geographical proximity, innovation focus of the firm and cooperation with customers.Design/methodology/approachA logistic regression model is applied, and four hypotheses are tested using data from the Eurostat Community Innovation Survey 2018. The cross-sectional data set consists of 13,723 firms innovating services in selected European Union countries.FindingsThe findings verify the importance of coopetition for service innovation. However, the coopetitive partners’ nationality does not have a significant impact. Furthermore, the integration of customer cooperation with coopetition enhances service innovation. Hence, competing partners seem not to avoid cooperation in output functions near the customers. To coopete in innovation is risky, but the findings reveal that partners develop novel services through coopetition, intended to produce a higher return to compensate for the risks.Originality/valuePresumably, this is one of the first large-scale studies examining the impact of coopetition on service innovation in a European context. This study indicates that coopetition amplifies service innovation, thus reducing the divergent views on the impact of coopetition on innovation performance. It responds to the request for more research on the context of coopetitive innovation by explaining how the firms’ geographical proximity, innovation focus and cooperation with customers impact their service innovation performance.

Cultural and creative industries: Innovation, performance and spillovers

ABSTRACT In recent decades, cultural and creative industries (CCIs) have enjoyed attention from academics and policymakers, as they are argued to be innovative and thus a driving force in new economies and keeping firms competitive. The purpose of the article is to explore CCIs and their innovative performances, and to analyse whether intermediate CCIs services’ inputs affect innovative output in other parts of the economy. In their analysis, the authors use quantitative data on innovation output from the Norwegian dataset on innovation from Eurostat’s Community Innovation Survey (CIS). Microdata on innovation output were merged with accounting data derived from Statistics Norway. The main findings are that CCIs’ firms do not generally report higher innovation output rates than firms in other industries, and that there are significant differences in innovation output rates between firms with and without CCIs’ input. However, the analyses do indicate that innovative and profitable firms may be more inclined to take advantage of CCIs’ input than other firms. The authors concluded that the direction of correlation may thus well be the opposite of common beliefs and arguments.

Learning-by-exporting: The strategic role of organizational innovation

Drawing on organizational learning theory, this study examines the strategic role of organizational innovation in learning to innovate by exporting, commonly known as ‘learning-by-exporting’ (LBE). We explain that mere knowledge access is distinct from the enactment of knowledge, and this matters for LBE. Despite growing interest in how firms enhance product innovation performance through exporting and thus, LBE, previous literature has remained silent on the role played by strategically induced changes to organizational routines when learning. We hypothesize that some exporters will introduce organizational innovations – aimed at changing internal practices and routines – which then allows them to enact new knowledge and enhance innovation performance following engagement in export markets. We study our hypotheses, using panel data of 1489 medium-sized manufacturing firms taken from the Mannheim Innovation Panel, the German contribution to the Community Innovation Survey (CIS). We find LBE effects solely amongst firms which adopted organizational innovations during the studied period. Further, our findings revealed that the extent and type of organizational innovation markedly influences LBE. Our study uses a novel context to explain that it is the presence and extent of organizational innovations which influence firms’ abilities to enhance product innovation performance following international engagement through exports.

Business model innovation elements and product innovation radicalness: Central European lessons for innovation leaders and followers

Research background: Despite the increased interest in business model innovation (BMI) in the last 20 years, the current research landscape still lacks empirical efforts aimed at investigating the underexplored link between BMI and innovation performance. This is doubly true in specific contexts like Central European countries, whereas innovation systems are weaker than in Western ones, and firms strongly depend on internal R&D activities and absorptive capacity and technology upgrades via cooperation with other countries. Purpose of the article: This study draws on the BMI theory with the aim of analyzing the effects of each individual BMI element on firms’ performance in terms of creation of radical innovations vs incremental ones. Methods: The data used are from the Community Innovation Survey (CIS) 2018 — the latest micro data available to date — focusing on 16,364 firms in Central Europe, namely 5,749 Czech, 7,377 Hungarian, and 3,238 Slovakian firms. As the explained (dependent) variables are dichotomous (binary: 1 indicates the answer is yes, 0 indicates the answer is no) for all estimated models, a binary logistic regression is used in order to focus on the individual elements representing BMI and analyse their separated effects on firms’ creation of radical and incremental innovations in Central Europe. Individual BMI elements are: BMI methods, logistics, communication, accounting, external relations, human resource management, and marketing. Moreover, we check for control variables such as tax credits and allowances of R&D, public funding of innovation, cooperation with other organizations on R&D or other activities, in-house R&D activities and contracted out ones, lack of finance, lack of skilled employees and internal financial resources, and size. Findings & value added: For radical innovators, practices for organising procedures and external relations are important. For incremental innovators, methods of organising work responsibility, decision making, and human resource management are significant. Surprisingly, regardless of the innovation radicality, several BMI elements are significant. This study suggests that managers should enhance strategic collaborations with external partners out of Central Europe, exploit their absorptive capacity, and increase the knowledge and experience of their employees, whilst policymakers should keep on providing tax credits and allowances for innovation activities, maintaining a supportive infrastructure and reducing administrative burdens.

Innovation for environmental sustainability: business models for SMEs

PurposeAn effective business model (BM) is essential for the success of any company, with sustainable innovation being a critical component of this model. This entails finding creative ways to meet present needs without compromising future generations. In this regard, cooperation can be crucial in developing sustainable innovation. This paper investigates how different types of cooperation impact the development of small and medium-sized enterprises (SMEs) innovation for environmental sustainability. In this sense, it intends to compare the effects of cooperation acquired nationally or at a European level.Design/methodology/approachThe methods used are logistic regression for the sample of 87,374 observations from 14 countries of the Eurostat Community Innovation Survey (CIS) database.FindingsThe results confirm that cooperation with national or European agents significantly impacts the innovation for environmental sustainability of SMEs; however, not all cooperations have the same significance level. At a national level, cooperation with the suppliers of equipment, materials, components or software, clients or customers and universities or other higher education institutes impacts the innovations for environmental sustainability developed by SMEs. At a European level, cooperation established with other enterprises within your enterprise group, equipment, materials, components or software suppliers, clients or customers and government, public or private research institutes significantly impacts innovations for environmental sustainability.Originality/valueThis study also provides substantial theoretical contributions on the subject and more information about the importance of cooperation by SMEs in developing innovation for environmental sustainability.

Is innovation failure just a dead end?

This paper explores whether failures in innovation projects at the firm level contribute to strengthening firms’ innovative activities and the odds of future innovation. Building on the literature on NK fitness landscapes, our paper focuses on technological complexity as a key factor that influences the response to innovation failures, guiding whether to discontinue the current path or, alternatively, to leverage the failure as a foundation for future innovation success. We then test the hypothesis derived from our model using a panel data set constituted by ten waves of the Community Innovation Survey held in the Netherlands from 1996 to 2014. Our findings show the fundamental relevance of the different forms of learning that are available to the firm. In particular, we highlight the positive role of learning after a previous innovation project has been abandoned. Previous failure in innovating produces some forms of learning inside the firms, and this learning positively contributes to subsequent successful innovation. Moreover, by differentiating between radical and incremental innovation, and between complex and less-complex innovation landscapes, we highlight the role of incremental innovation over the whole spectrum of landscape complexity, while the role of radical innovation appears to be more limited to less turbulent technological landscapes.

Environmental corporate social responsibility practices and firm innovation: Complementarities and empirical evidence from Spanish firms

This study examines the complementarity effect of combining different types of environmental corporate social responsibility (ECSR) practices on firm innovation. We apply the complementarity approach to test whether the adoption of different ECSR practices (i.e. practices for fewer materials per unit produced [materials], less energy per unit produced [energy], or decreasing environmental impact [impact]) generates super-additive effects on firms’ innovation, measured by innovations type: adoption, new-to-the-market, and new-to-the-firm innovation. We use data from the Spanish Community Innovation Survey for the period 2009–2014. The results show that the best combination of ECSR practices depends on the innovation type. For innovation adoption, all possible combinations of the three practices produce super-additive effects; however, the complementarity patterns differ for new-to-the-market and new-to-the-firm innovations. For new-to-the-market innovation, energy practices appear to be a key factor in fostering innovation when combined with materials or impact practices. For new-to-the-firm innovation, the combination of these three ECSR practices shows complementarity effects. These findings provide useful insights for the design of corporate social responsibility strategies.

The Impact of Regulation on Environmental Performance: an Analysis for European Countries

This study provides new evidence on factors driving firms´ eco innovation in the European Union, based on the data of the Community Innovation Survey for the years 2008 and 2014 for eleven European countries. First, our findings reveal that the propensity to eco-innovate changes over time. Second, the propensity to eco-innovate is unequally distributed across sectors, given that it is concentrated in a few sectors. Third, we find that sectoral behavior is strongly influenced by the taxonomy of green sectors introduced by the European Union, since the propensity to innovate is higher in the carbon leakage taxonomy than in the mitigation and adaptation taxonomy. These results provide further insights into the sectoral factors driving eco-innovation diffusion. Moreover, these findings are relevant to increase environmental stringency, as they contribute to the diffusion of eco-innovation across sectors, especially in those that do not innovate.
 

Understanding the relationship between competitive strategy and product-service innovation: the role of the paradox of openness

PurposeThis study aims to investigate the relationship between strategy intent (product-service innovation intention) and outcome (product-service innovation outcome), and the role that external sources of innovation play in influencing this relationship.Design/methodology/approachUsing data obtained from the community innovation survey, we apply a logit regression to a sample of 1,419 Portuguese firms. By examining the moderating effect of open innovation breadth, we assess how the relationship between differentiation intent and outcome is contingent upon the involvement of external stakeholders.FindingsOur findings reveal that the relationship between differentiation intent and outcome is contingent upon the moderating effect of open innovation breadth. Our analysis suggests that the negative influence of different sources of innovation can be addressed by adopting a paradox lens.Practical implicationsThis research provides valuable insights for managers. By simultaneously pursuing a differentiation strategy and engaging in collaboration with external sources, firms may compromise their ability to effectively differentiate their offer. Managers should consider the potential tensions arising from internal and external stakeholder relationships to optimize their innovation strategies.Originality/valueThis study contributes to the existing literature by shedding light on the role of external innovation sources in influencing the relationship between differentiation intent and outcome and the importance that information systems may have in this relationship. By exploring the moderating effect of open innovation breadth, we provide a nuanced understanding of how firms can navigate organizational tensions and leverage innovation for competitive advantage.

Comparison of the Profile of Portuguese Companies That Receive Public Support for Innovation: National Support vs. European Support

Innovation has emerged as the key driver of economic growth, technological advancement, and societal well-being. Recognizing the significance of fostering innovation, governments and policymakers worldwide have increasingly emphasized the need for public support to bolster the innovation ecosystem. This article explores the crucial importance of public support for innovation and delves into the characteristics of companies that receive such support. Based on the Community Innovation Survey of 2014, 2016, and 2018, information was compiled from 1857 companies. Of these companies, common to these 6 years of information, 755 received national support for innovation and 490 received European support. Based on these data, the main objective was to identify and distinguish the characteristics of Portuguese companies that receive European support and national support for innovation. To achieve this objective, logit models were estimated using Stata software. The results suggest that national support favors companies that belong to sectors with greater technological development, which develop new products and processes. Companies that establish cooperation agreements and that belong to groups of companies are also preferred for national support. In turn, of the companies that received European support, it appears that there is less differentiation in preference for the level of technological development. Companies that invest internally in R&D and that establish cooperation agreements for innovation are more likely to obtain European support, as are companies that have a higher proportion of workers with higher education. Finally, both national and European support favor companies with a greater volume of business from foreign markets.

Collaborative routes to innovation success in the periphery – a configurational approach

ABSTRACT The purpose of the article is to add to the current debate in the literature of economic geography on innovation capacity in the periphery and the role of collaboration patterns important for innovation. Empirical data from the Community Innovation Survey (CIS) in Norway and qualitative comparative analysis (QCA) are used to demonstrate how conditions in combination (configurations) lead to high levels of innovation for some peripheral regions in Norway. The authors demonstrate different routes to high product and process innovation levels for the regions. The findings demonstrate a variety of available routes to increase the innovation capacity of peripheral regions, and the study adds new knowledge on the heterogeneity of peripheries. Moreover, there is extensive variation within counties, where certain economic regions are strong innovators, whereas others are slow movers. The authors conclude by calling for innovation policies that consider the heterogeneity of innovation activity at the county level where different subregions have different needs.

Deciphering the determinants of firm’s engagement with universities: An insight into the Thai industrial landscape

The burgeoning interest in university-industry collaborations (UIC) has sparked significant attention in both management practice and research. However, despite extensive efforts to identify the determinants of UIC, the majority of studies have predominantly focused on the motivations of academic researchers and limited UIC channels. This study aims to delve deeper into the influence of five factors—structural, behavioral, motivational, attitudinal and policy-related on firms' decisions to collaborate with universities across five collaboration forms: research partnership, researcher service, technology transfer, utilization of university facilities, and human resource transfer. The research draws upon original microdata from the Thai Community Innovation survey, encompassing 8701 firms and spanning the years 2015, 2017, and 2018. By employing a multivariate probit model, the results unveil that Thai firms perceiving universities as innovation sources are inclined to engage with them irrespective of the UIC channels. However, the effects of structural, behavioral, and motivational factors differ when influencing industry participation in various UIC modes. Thus, this research significantly contributes to the UIC literature by offering both theoretical and practical insights. The nuanced understanding of the factors influencing collaborative decisions can inform policymakers and managers seeking to foster effective university-industry partnerships. The identified implications underscore the need for a more tailored approach, recognizing the diversity of influences on UIC, thereby advancing both academic discourse and practical strategies in the field.

Organizational ambidexterity, open innovation and innovation outputs: How do followers and low-flyer EU countries innovate?

This study analyses the role played by organizational ambidexterity and open innovation in innovation outputs, considering business units with different levels of technological intensity (medium-high and high tech, and medium-low and low tech) for countries with different innovation profiles. The countries considered in this paper are i) Estonia and Slovenia as innovation followers; ii) Slovakia, Hungary, Spain, Czech Republic, Italy, Portugal, Norway, and Croatia as moderate innovators; and iii) Bulgaria, Lithuania and Romania as modest innovators. In the empirical approach, the research hypotheses arise from the literature review and are tested using secondary data collected from the Community Innovation Survey (CIS) 2010. The conceptual model is tested using the logistic regression method, which indicates suitable accuracy and reliability for empirical testing purposes. The evidence reveals that for innovation followers, ambidexterity has a greater influence on the practice of eco-innovation, marketing innovation, and product innovation. For moderate innovators, ambidexterity has a greater influence on the practice of product innovation, process innovation, and eco-innovation. Concerning modest innovators, ambidexterity has a greater influence on the practice of product innovation, process innovation, and eco-innovation. With regard to open innovation, for innovation followers, this has a negative influence on product innovation in medium-high and high-tech companies. For moderate innovators, open innovation has a greater influence in process, organizational, and eco-innovation. In the case of modest innovators, open innovation is more significant for innovation outputs in product, organizational, and marketing innovation. Size is not always positively related to innovation outputs.

Technological Uncertainty and Standardization Strategies: A Coopetition Framework

Standards may be arrived at through various coordination mechanisms, including cooperation, coopetition, or competition. This article explores how technological uncertainty affects the coordination mechanism for standardization. The article is based on the Community Innovation Survey, a sizeable firm-level survey representative of the Luxembourgish economy. The econometric analysis finds evidence that firms facing technological uncertainty will choose for standardization through competition and coopetition.

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.

Barriers to product innovation: An empirical study in Portuguese services SME

This study aims to explore the relations between financial, knowledge and market barriers to innovation and the innovation propensity of the Portuguese SMEs services sector, specifically at the product level. Utilizing data from the Community Innovation Survey (CIS) covering the years 2018-2020, the analysis focuses on a sample of 9238 companies within the service sector, each employing between 10 and 249 individuals. The research employs a logistic regression model to assess these relationships. The findings highlight that some obstacles, such as insufficient credit or private investment and restricted access to external knowledge, are perceived as hindrances to product innovation. Interestingly, some barriers to innovation, such as the lack of skilled personnel and elevated costs, can paradoxically serve as catalysts for innovation.

The role of innovation portfolio in green innovation decisions: A study of French and Italian firms

Recent research has shown that Green Innovation (GI) may be a profitable strategy, provided that the innovating firm enjoys synergies raised by specific combinations of innovation domains. Therefore, GI decisions may depend on the firm's overall innovation portfolio. Along this line of research, this paper aims at identifying combinations of innovation domains (product, process, organization and marketing) which affect a firm's decision to engage in green innovation. We propose a conceptual framework of interactions among innovation domains whose hypotheses are tested based on the Community Innovation Survey (CIS 2012–2014) dataset for France and Italy. Separately for each country, we identify synergic effects of technological (product and process), non-technological (organizational and marketing), demand-related (product and marketing) and supply-related (process and organizational) innovation domains. We find that all the above synergy axis favor GI, and this holds regardless of the surveyed country. However, other combinations of innovation domains do not favor GI and may even hinder it. Specifically, the interaction between process and marketing innovation, might have a negative effect on a firm's likelihood to engage in GI. This occurs in the French sample, while the effect is neutral in the Italian one.

Digital technologies, learning capacity of the organization and innovation: EU-wide empirical evidence from a combined dataset

Abstract This paper investigates the effects of digitalization and organizational practices on innovation in Europe, between 2010 and 2016. We analyze the cross-country and industry differences in firms’ investments and capabilities to adopt and use new technologies and their effects on innovation outputs. Along with traditional drivers of innovation, such as research and development (R&D) expenditure, two composite indicators are constructed. One encompasses direct measures of the adoption and use in enterprises of a set of digital technologies. The other measures the learning capacity of organizations, which captures the use of management tools and organizational practices concerned with the improvement of individual and organizational learning. Product, process, organizational, and marketing innovations are identified as well as their combinations within companies. Empirical evidence is provided by a unique dataset based on the integration at the sector within the country level of European Union (EU)-wide employers’ and employees’ surveys: the Community Innovation Survey (CIS), the Community Information and Communication Technologies (ICT) usage and e-commerce in enterprises survey (Eurostat), and the European Working Conditions Survey (Eurofound). The descriptive evidence shows that Digital technology adoption and use is rapidly growing across Europe, while the Learning capacity of organizations remains stagnant. By contrast, our results from the econometric analysis show that these investments can favor all forms of innovations and that, further, they may show some complementarity. Overall, a mix of product/process innovations and organizational/marketing innovations rests on joint investments in R&D, digital technology adoption and use, and learning capacity of the organization.