Determinants of innovation in Croatian SMEs: Comparison of service and manufacturing firms
Ljiljana Bozic & Pierre Mohnen
#2016-008
In this paper we focus on SMEs in Croatia operating in the manufacturing
and services sectors and seek to compare them in terms of their
involvement in innovation activities, the factors that determine their
decision to innovate in general and in four types of innovations in
particular: product/service, process, organisational and marketing
innovations. The analysis relies on the Croatian Community Innovation
Survey 2010 (CIS 2010) data. To find out whether innovations have a
different pattern of drivers in manufacturing and in services, we
estimate the probit and multivariate probit models separately on these
two groups of firms. The findings reveal that despite some differences,
service and manufacturing SMEs are not that different from one another
when it comes to innovation activities. Service SMEs are somewhat less
likely to introduce technological innovations, but manufacturing and
service SMEs do not significantly differ from each other when it comes
to non-technological innovations. One noteworthy difference between
manufacturing and service SMEs is that the latter rely much more than
the former on acquired knowledge.
Keywords: Croatia, innovation, services, manufacturing, SME,
multivariate probit.
JEL Classification: O31, L80