This paper investigates the influence of research and development (R&D) cooperation on the creation of spillover effects for sustainable firms in the chemical industry. We explore the evidence for the origin of knowledge spillovers derived from cooperation amongst firms and universities and R&D organizations as well as to test the influence of internal/external financial support on these effects. The results confirm that when firms acquire knowledge from internal sources, this leads to increased innovation and sustainable performance. We have proved that internal expenditure results in increased internal knowledge spillovers. These findings may be specific for Central and Eastern (CEE) transition countries, indicating their efforts to build path-dependent structures based on knowledge institutions and businesses as well as knowledge networks. However, this study also provides a more “global” contribution to the knowledge spillover effect theory. It shows that a firm’s cooperation both with universities and with other firms promotes different types of knowledge spillovers and can affect diverse modes of sustainable activities in innovation.

Prior research showed that there is a growing consensus among researchers, which point out a key role of external knowledge sources such as external R&D and technologies in enhancing firms´ innovation. However, firms´ from catching-up Central and Eastern European (CEE) countries have already shown in the past that their innovation models differ from those applied, for example, in Western Europe. This study therefore introduces a novel two-staged model combining artificial neural networks and random forests to reveal the importance of internal and external factors influencing firms´ innovation performance in the case of 3,361 firms from six catching-up CEE countries (Czech Republic, Slovakia, Poland, Estonia, Latvia and Lithuania), by using the World Banks´ Enterprise Survey data from 2019. We confirm the hypothesis that innovators in the catching-up CEE countries depend more on internal knowledge sources and, moreover, that participation in the firms groups represents an important factor of firms´ innovation. Surprisingly, we reject the hypothesis that foreign technologies are a crucial source of external knowledge. This study contributes to the theories of open innovation and absorptive capacity in the context of selected CEE countries and provides several practical implications for firms.

In the present day, innovation has become a key element of competitive advantage. However, most countries are failing in their innovative activities, and their innovative performance is below that of the EU average. Therefore, the European Commission annually publishes its Innovation Union Scoreboard, which provides a comparative assessment of the EU member states’ research and innovation performance. The countries are divided into four groups according to their innovation performance: innovation leaders, strong innovators, moderate innovators, and modest innovators. In this paper, we have selected countries whose innovation performance was close to, below, or well below that of the EU average in 2015, and we have performed microeconomic analysis of the situation in these countries’ firms to analyze the conditions of their innovation environment and uncover barriers to their innovation activities. We analyzed firms in the manufacturing industries in Slovenia (a strong innovator), Croatia (a moderate innovator), and Romania (a modest innovator) by using original multiple regression models and data from the 2010–2012 Community Innovation Survey. The results demonstrate the different backgrounds for innovation in each country. In Romania, there is a lack of both a satisfactory environment for innovation and sufficient capacity for absorbing public funds; investment into innovation-related activities is also absent. In Croatia, the innovation potential has not been fully exploited. However, we show that the appropriate targeting of innovation determinants (e.g., collaboration with different partners or public financing) could lead to the creation of synergies and spillover effects that would be able to support their innovative activities and strengthen the country’s competitiveness. There is a completely different situation in Slovenia. Firms there effectively utilize the various determinants of innovation activities, and these determinants have strong influence when utilized on their own. On the other hand, results also show that certain significant combinations of determinants of innovation activities are missing in Slovenia. In conclusion, we have proposed practical implications for policy makers that would be able to support innovative activities and help each country to improve its innovation ranking.DOI: http://dx.doi.org/10.5755/j01.ee.28.1.16111