, Volume 43, Issue 1, pp 111–139 | Cite as

Innovation behaviour of firms in a small open economy: the case of the Czech manufacturing industry

Original Paper


This paper describes the role of R&D and analyse its impact on productivity in the Czech economy in a CDM model. Four CIS waves (2001, 2003, 2006, and 2008) were used in the CDM model. The estimated low innovation input elasticity around 9 % describes the Czechs as poor innovators in the EU. This economy was a developing country until 2006 and we have observed a substantive FDI inflow since 1998. Multinationals have a higher sales share now and are an essential part of the economy. Multinationals engage less in innovation, but innovating MNEs spend more on R&D per employee and appropriate more from their innovated goods. The FDI inflow was a form of innovation wave. Innovation output is an important determinant for boosting productivity among SME’s. Public support had positive effect on innovation intensity; however, no additional effect on innovation output.


Innovation Multinationals SME Transitional economy Open economy 

JEL Classification

O33 L60 D24 O38 



This paper is a result of the academic work at the University of J. E. Purkyně in Ústí nad Labem, Czech Republic.


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Copyright information

© Springer Science+Business Media New York 2015

Authors and Affiliations

  1. 1.Faculty of Social and Economic StudiesUniversity of J. E. Purkyně in Ústí nad LabemÚstí nad LabemCzech Republic

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