Innovation Activities Of Firms Research Articles

Effectiveness of Innovation Support from EU Funds Program

The aim of this article is to analyse the consequences of innovation activities of firms on their financial indicators for projects financed from the Operational Programme of Enterprise and Innovation. The analysis was based on publicly available data. Limitations of this approach are discussed below, it is primarily the fact that we are seeing the effects indirectly; we do not monitor the success of projects, but entire companies. OPEI was divided according to the objective of promoting into several groups. The article focuses on subjects which directly stated innovation as the aim of promotion. The methodology of evaluating the companies was based on the literature; the chosen financial indicators were monitored at intervals. The research results show that the support in this section shows positive effects, but depending on the year, when it was assigned, which shows that the distribution of public funds depends on the selection of supported entities.

Open Innovation in SMEs: Drivers and Inhibitors

Open innovation has of late emerged as a popular innovation management concept that advocates opening up of the innovation processes in firms. Despite researchers writing against open innovation being a new concept, research into open innovation activities of firms, as evidenced by the growing number of related research papers and books, has proliferated. In this concept paper, through a scrutiny of published open innovation research work, we look at the concept of open innovation in general and then zoom in on the factors that drive and inhibit its implementation especially in SMEs. The analysis shows that the drivers of open innovation include meeting customer demand, while employee resistance in the form of not-invented-here (NIH) and not-shared-here or not-sold-here (NSH) syndromes can inhibit open innovation. The paper, with implications for practice and theory, ends with a summary of open innovation and its drivers and inhibitors.

How Does Technological Regime Affect Performance of Technology Development Projects?

In this study, we examine how technological regime affects the performance of technology development projects (i.e., project quality, sales, and profit). Technological regime is defined as the set of attributes of a technological environment where the innovative activities of firms take place. Technological opportunity, appropriability of innovations, cumulativeness of knowledge and capabilities, and closeness of knowledge base to basic sciences (versus applied sciences) are attributes of technological regime. Using data from 381 firms across five industries, we show that high levels of technological opportunity, appropriability, and closeness of knowledge base to basic sciences are associated with higher project performance. Cumulativeness is associated with higher project quality, but not higher sales and profit. We also show that the effect of technological opportunity on project performance is moderated by two other determinants of technological regime: cumulativeness and nature of knowledge base. We find that cumulativeness has a negative moderating effect on the positive relationship between technological opportunity and project performance, while closeness of knowledge base to basic sciences positively moderates the effect of technological opportunity on project performance. We discuss the implications of our findings for new product development research and practice.

R&D drivers and age: Are young firms different?

This study examines the relationship between R&D drivers and firm's age, taking into account the autoregressive nature of innovation.Using a large longitudinal dataset comprising Spanish manufacturing firms over the period 1990–2008, we find that previous R&D experience is a fundamental determinant for mature and young firms, albeit to a smaller extent in the case of younger firms, suggesting that their innovation behaviour is less persistent and more erratic.Moreover, our results suggest that firm and market characteristics play a distinct role in boosting the innovation activity of firms of different ages. In particular, while market concentration and the degree of product diversification are found to be important in fostering R&D activities in the subsample of mature firms only, young firms’ spending on R&D appears to be more sensitive to demand-pull variables.These results have been obtained using a recently proposed dynamic type-2 tobit estimator, which accounts for individual effects and efficiently handles the initial conditions problem.

Corporate social responsibility driven innovation

This study identifies the substantial relationship between corporate social responsibility (CSR) and innovation activities of firms. Using the French Vigeo sustainability rating and the Thomson Reuters, we divided 619 firms into groups by their industry sectors, regions, and firm characteristics such as size and age. We premise that innovative investment is needed to prepare tomorrow's profits not only by considering investments in technology and in R&D, but also by dealing with sustainability to human, social, environmental, technical, and economic investments. Consequently, when the firm manipulates its short- and long-run business strategies, the consideration of the correlation between types of investment and CSR initiatives will lead to more cooperating effect on the outcome of investments. The findings provide a comprehensive understanding on the effect of sustainable management strategies on the innovation and sustainability of firms.

Diferenças setoriais da atividade inovativa das pequenas empresas industriais brasileiras

O artigo apresenta os resultados de uma pesquisa sobre as diferenças setoriais da atividade de inovação das pequenas empresas industriais brasileiras. A hipótese que norteou a elaboração do trabalho, desenvolvida originalmente no estudo de Pavitt (1984), assume a existência de heterogeneidade setorial no processo de geração de inovações, no que se refere tanto às fontes de conhecimento e relações de cooperação, quanto aos resultados, expressos nas taxas de inovação de produto e processo. No trabalho, foram utilizados os dados da Pesquisa de Inovação Tecnológica (Pintec) de 2008, realizada pelo Instituto Brasileiro de Geografia e Estatística (IBGE). Mediante a utilização de uma tabulação especial desenvolvida para o presente trabalho, apresentam-se os dados por porte de empresa e setor de atividade. Os resultados encontrados confirmam a hipótese principal e mostram que o comportamento inovativo das pequenas empresas deve ser apreendido à luz das especificidades setoriais que permeiam a atividade de inovação, o que vai ao encontro de proposições da literatura.

Knowledge-based resources and innovation in the hotel industry

Although the study of innovation in the hotel industry is a key issue, little is known about the determinants of innovation in this sector, as most innovation research has focused on manufacturing firms or knowledge-intensive services. Furthermore, although research suggests that knowledge is a critical asset for achieving innovation performance, few studies have explored how knowledge operates in the hotel industry. This paper aims to provide empirical evidence about the role played by a set of knowledge-based resources in determining innovation activity in tourist accommodation firms. Data from 109 companies operating hotels in Spain suggest that intangible assets should be considered in this sector when attempting to explain the innovation capacity of firms.

To what extent do financing constraints affect Chinese firms' innovation activities?

We investigate the extent to which financing constraints affect the innovation activities of over 120,000 mainly unlisted Chinese firms over the period 2000–2007. Based on a variety of specifications and estimation methods, we document that Chinese firms' innovation activities are constrained by the availability of internal finance. Specifically, private firms suffer the most, followed by foreign firms, while state-owned and collective enterprises are the least constrained. Moreover, the availability of internal finance represents a particularly binding constraint on the innovation activities of small firms, located in the coastal provinces, with low political affiliation, and fewer state shares, as well as for sole proprietorship firms.

How is Moral Hazard Related to Financing R&D and Innovations?

The aim of this study is to investigate how moral hazard arises during financing R&D and technological innovation activities of firms through their corporate governance attributes and firm-specific characteristics. We study 106 firms that received a specially designed loan by a Turkish government to be invested only in R&D and technological innovations. We find that as the size of the loan increases firms are less prone to moral hazard. For family firms our results support the agency theory. For large shareholders, initially our results are aligned with the agency theory but after controlling for the loan size our results hold for the stewardship theory. Finally we find that as amount of the loans increases relative to size of firms, the performance of projects financed by these loans plummets. Finally, we show that moral hazard related to R&D and innovation activities varies across industries.

Relevance of innovation cooperation for firms’ innovation activity: the case of Slovenia

The paper analyses the importance of innovation cooperation on the innovation activity of Slovenian firms, and puts it within the broader context of firm’s innovation activity determinants. Probit estimations based on firm-level data confirm that, next to R&D spending, innovation cooperation is the most important factor in firms’ probability to innovate. This paper is the first to explicitly analyse the effect of variety and different types of innovation cooperation. Within innovation cooperation, a significant and positive effect on innovation activity is confirmed for domestic as well as for international innovation cooperation, for public as well as private cooperation, especially with customers, suppliers and advisors, but not for cooperation with public institutions such as universities and R&D institutes. Innovation cooperation should, thus, be more intensively promoted, especially in countries that lag behind in own R&D spending.

What Types of Bondholders Impede Corporate Innovative Activities?

​This study investigates whether institutional bond blockholders (i.e., bond funds that hold more than 5% of a firm’s outstanding bonds) impede firm innovative activities, and if they do, through which channels. We find that long-term bond blockholders do not discourage firms from conducting innovative activities. Short-term bond blockholders, however, significantly reduce both firm investments in R&D and the innovative quality of these investments. Furthermore, their negative impact is stronger than the negative impact of short-term stockholders. Our results cannot be fully explained by short-term bondholders’ a priori investment preferences and are robust to possible endogeneity concerns. Overall, they suggest that the option of the ‘Wall Street walk’ allows bondholders to exert considerable influence on firms’ risk-taking decisions.

Drivers of innovation capital disclosure in intellectual capital statements: Evidence from Europe

Innovation is one of the major determinants of competitive success. As a result, there is demand for information on the innovation activities of firms among investors, other stakeholders and the public. Using content analysis, this paper examines the innovation capital disclosure (INCD) characteristics (i.e. disclosure quantity and quality) in the intellectual capital statements (ICS) of 51 European for-profit firms. Additionally, the relationships between INCD characteristics and industry, firm size, region of registered office and the disclosure guidelines adopted are analysed. Our content analysis detects an average of 29.16 items on innovation capital (INC) per ICS. These are mainly qualitative, non-financial and historically orientated. Furthermore, as expected, industry, firm size, region and disclosure guidelines drive the quantity of disclosure. Prior empirical studies of voluntary disclosure in documents other than ICS have also suggested a relationship between firm size and disclosure quality. Interestingly, our results for INCD in ICS do not support this relationship. This provides tentative evidence for a similar qualitative level of innovation capital disclosure across firm size. Furthermore, our findings show mostly homogeneous disclosure patterns across the regions in Europe, suggesting that multinational efforts towards fostering INCD has made the ICS phenomenon more a European than a local phenomenon.

Impact of Economic Crisis on Innovation Behaviour of Industrial Firms In Russia

The paper focuses on empirical analysis of major factors that determine innovation activities of Russian manufacturing firms during the crisis. We presume that the crisis has ambiguous effects on firms’ behaviour, on one hand limiting their financial capabilities to invest into new products and/or technologies, and on the other hand – creating additional incentives to innovate and opportunities to enter new markets. We use micro-level data to reveal major determinants of changes in innovation activity of a firm, including structural characteristics (size, industry, etc.), competitive environment (intensity of competition and type of main competitors), changes in financial position of a firm, it’s pre-crisis performance and innovation activity, the declared strategy of a firm and other factors. The empirical part of our research is based mostly on the results of two surveys of industrial firms conducted in August of 2008 (before the crisis) and in September 2009 (during the crisis). About 600 medium and large firms mostly in manufacturing industries have been surveyed using specially developed survey instruments. We show that while general impact of the crisis on innovation activity was strong and negative different industries have been damaged to different extent. The adjustment to the crisis led to sharp decrease in investment intensive innovations while R&D activity has diminished much less and for some groups of firms has even intensified. The drop in innovations is typical for firms pursuing the strategy of incremental improvements of technology and products or with the strategy of large-scale investments in enhancing the production of traditional goods, rather than for firms focused on the development of new products. We found further that about 30% of manufacturing firms during the crisis still pursued innovation based strategies and this behaviour does not is depend on industry or even financial position.

Size and ownership of enterprise and innovation activities of food and beverages manufacturers in western Poland in 2009-2012 / Wielkość i charakter własności przedsiębiorstwa a działalność innowacyjna przedsiębiorstw sektora spożywczego w zachodniej Polsce w latach 2009-2012

The paper presents the results of a study aimed at determining the nature of relations between innovation activities and company size and company’s ownership in the food and beverage sector in western Poland in 2009-2012. The most innovation active enterprises are medium-sized companies, which are also the only group which leads innovation cooperation with its suppliers and customers. Among the most frequently taken innovation activities are: the implementation of new technological processes, investments in new fixed assets including computer software and investments in R & D. The least innovation active firms are domestic micro and small enterprises.

PERSISTENCE OF POLITICIANS AND FIRMS' INNOVATION

We empirically investigate whether the persistence of politicians in political institutions affects the innovation activity of firms. We use 12,000 firm‐level observations from three waves of the Italian Observatory over Small and Medium Enterprises, and introduce a measure of political persistence defined as the average length of individual political careers in political institutions of Italian municipalities. Using death of politicians as an exogenous source of variation of political persistence, we find a robust negative relation between political persistence and the probability of process innovation. This finding is consistent with the view that political stability may hinder firms' incentive to innovate to maintain their competitiveness, as long as they can extract rents from long‐term connections with politicians. (JEL D22, D72, O31)

Effect of Institutional Configuration on Innovation Activities in East Asian Firms

This paper looks to contribute to the recent literature on institutional comparative analyses of Asian economies; it makes three distinct contributions. First, the authors investigate the institutional diversity of Asian economies by using multivariate methods, and show five different groups within Asian economies that can be distinguished from advanced economies. Second, based on firm-level data, they determine whether institutional environments have a favorable effect on the innovation activities of firms; concurrently, and discuss whether or not joining a global supply chain induces firms to engage in innovation activities. Their analytical results show that institutional characteristics have a positive effect on firms’ decisions to engage in those activities, and that institutional configurations provide the foundation for a global supply chain built in East Asian economies. Third, the authors emphasize that the current institutional diversity can persist, given the positive interaction between the institutional diversity of Asian economies and the innovation activities of Asian firms.

Financial Constraints and the Failure of Innovation Projects

Theoretical and empirical approaches have stressed the existence of financial constraints in innovative activities of firms. This paper analyses the role of financial obstacles on the likelihood of abandoning an innovation project. Although a large number of innovation projects are abandoned before their completion, the empirical evidence has focused on the determinants of innovation while failed projects have received little attention. Our analysis differentiates between internal and external barriers on the probability of abandoning a project and we examine whether the effects are different depending on the stage of the innovation process. In the empirical analysis carried out for a panel data of potential innovative Spanish firms for the period 2004-2010, we use a bivariate probit model to take into account the simultaneity of financial constraints and the decision to abandon an innovation project. Our results show that financial constraints most affect the probability of abandoning an innovation project during the concept stage and that low-technological manufacturing and non-KIS service sectors are more sensitive to financial constraints.

Does Public Policy Stimulate Firm Entrepreneurial Behavior and Innovative Activities?

This paper studies the impact of public policies on the entrepreneurial behavior and innovative activities of firms in the German renewable energy industry. We take an institutional perspective and...

Institutional Ownership and the Role of Innovation

This study examines a wide belief in the institutional- investment-innovation literature that institutional investors have an effect on firm innovation activity. This study empirically examines the relationship between institutional ownership and innovation activity in the unique setting of the clinical trials for US biopharmaceutical companies. We used multiple statistical techniques over a 17-year period for 727 firm-year observations in the biopharmaceutical industry to examine this relationship. Contrary to the widely believed relationship discussed in the literature, our findings suggest that institutional investors do not react similarly after controlling for the strategy of the institutional investor. Specifically, we find that institutional investors with a long-term investment horizon increase their holdings in a firm as the number of its products increases in phases I and II of the clinical trial. These findings are robust for heteroskedasticity and autocorrelation as well as for different operationalizations of the change of institutional ownership.

Factors influencing innovation decision making in Portuguese firms

There is an undeniable positive effect of innovation for both firms and the economy, with particular regards to the financial performance of firms. However, there is an important role of the decision making process for the allocation of resources to finance the innovation process. The aim of this paper is to understand what factors explain the decision making process in innovation activities of Portuguese firms. This is an empirical study, based on the modern theoretical approaches, which has relied on five key aspects for innovation: barriers, sources, cooperation, funding; and the decision making process. Primary data was collected through surveys to firms that have applied for innovation programmes within the Portuguese innovation agency. Univariate and multivariate statistical techniques were used. Our results suggest that the factors that mostly influence the Portuguese firms’ innovation decision-making processes are economical and financial (namely those related to profit increase and labour costs reduction).