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The impact of knowledge spillovers and innovation on firm-performance: findings from the Balkans countries

Abstract

This paper investigates factors affecting firm performance. Using data from Business Environment and Enterprise Performance Surveys (BEEPS 2013–2014), findings indicate that the following have a positive effect on firm performance: (i) innovative activities; (ii) knowledge spillovers; (iii) foreign ownership; and (iv) the proportion of skilled workers in the workforce. The paper therefore argues that innovation activities are endogenously related to firm performance, and that the performance of firms is influenced by knowledge spillovers and innovation activities, among other firm characteristics. The paper contributes to the literature by identifying spillovers and innovation activities as causal variables of firm performance—a novel approach to investigating knowledge spillovers and innovation activities.

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Notes

  1. 1.

    For Greece there were no data on BEEPS dataset.

  2. 2.

    The violation of the zero-conditional-mean-assumption (E[u| x] = 0) can also arise for two other causes than endogeneity: omission of relevant variables and measurement error in regressors.

  3. 3.

    In the estimated equation with B>0 and B 2 <0, the turning point is always achieved at the coefficient on x over twice the absolute value of the coefficient on X2. X* = |B 1 /(2B 2 )|.

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Correspondence to Veland Ramadani.

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Ramadani, V., Abazi-Alili, H., Dana, LP. et al. The impact of knowledge spillovers and innovation on firm-performance: findings from the Balkans countries. Int Entrep Manag J 13, 299–325 (2017). https://doi.org/10.1007/s11365-016-0393-8

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Keywords

  • Knowledge spillovers
  • Innovation
  • Performance
  • Balkans
  • Business Environment and Enterprise Performance Surveys (BEEPS)