Business Commons^™

Innovation Capacity: A Firm Level Response To Subsidy Activity In A National Setting, Assyad Al-Wreiket, Royce D. Burnett, Christopher J. Skousen, Ouadie Akaaboune

Accounting Faculty Publications

The purpose of this paper is to investigate the effect subsidies have on firm-level innovation across Eastern European and Central Asian countries and to assess if these effects move to increase firm-level capability. Specifically, we investigate the extent subsidy programs act to shape and guide firm-level innovative capabilities and how the presence of such capabilities affect operational performance. We employ a Probit model to investigate firm-level innovation and OLS regression to assess how subsidies, in association with the decision to adopt foreign technology and in-house research and development (R&D) affect firm productive capacity. Results suggest subsidies promote innovation and that …