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This study investigated the importance of partnerships with the Government for the development of the four types of innovation (product, process, organizational and marketing) by firms of two different groups of Central and Eastern Europe countries, including the European ex-soviet republics (countries that joined the European Union - CEUs, and countries that did not join it - CNEUs); and how each type of innovation affects the firms’ financial performance. To achieve this goal, we tested a sample of 1,143 manufacturing SMEs from the Business Environment and Enterprise Performance Survey (BEEPS) using multiple regression and logit. Based on the absorptive capacity theory, we found that CEUs’ manufacturing SMEs have a higher absorptive capacity and get advantage from EU’s innovation promotion programs to innovate. On the other hand, firms from the CNEUs perceive a quicker effect of the innovations in the financial performance since there is a technological gap between the two groups, with CNEUs being less developed. Also, the introduction of different types of innovations simultaneously can boost the performance of CNEUs’ firms in the short run.

cadernos ebape.br

The impact of different types of innovation and governmental support in the performance of firms: the case of Central and Eastern Europe manufacturing SMEs