The Influence of Public Expenditure on Innovation Activity In Czech Manufacturing Industry

In this paper, we use the logistic regress models to examine the influence of public expenditure on innovation activity in Czech manufacturing industry. Specially, we study the influence of subsidies on the product, process, organizational and marketing innovation in three technology levels: low, medium and high tech in Czech manufacturing industry. We used the primary data from Eurostat (Community Innovation Survey). Specifically, we analyzed whether the size of the firm, geographic localization, some kinds of expenditures and government support from national and EU budgets influence the ability to produce the specific type of innovation. We show that product innovation is influenced by geographical localization, firm orientation on markets. Further, we found out that public expenditures strongly influence the process innovation, the national sources rather the marketing innovation. From this result we can discuss the efficiency of the public subsidies on innovation in future research.