FIRMS QUEST FOR INNOVATION: THE CASE OF SLOVAK AND HUNGARIAN MANUFACTURING FIRMS

Purpose: This paper seeks to examine the various sources of knowledge and innovation that Slovakian and Hungarian manufacturing firms rely on to improve their innovative performance. Design/methodology/approach: The multiple regression technique was employed using data from the community innovation survey conducted between 2010 and 2012. A sample of 3,576 manufacturing firms was used in the analysis. Their innovation performance was measured using their turnover to the market as the dependent variable and the sources of innovation as the independent variables. Findings: The results of our empirical analysis demonstrated divergent results for both countries. Slovak firms derived their innovation from in-house activities and other sources such as from scientific journals and conferences whilst Hungarian firms relied on market sources such as cooperation with clients or customers from the private sector for their innovation as well as from scientific journals. However, there was a convergence in the results, manufacturing firms in both countries didn't collaborate with research institutions such as universities and other public and private research organisation for their innovation. Research/practical implications: The result of the analysis has demonstrated that Slovak and Hungarian firms didn't depend on knowledge and innovation hubs for their innovation. This study therefore proposes firms to foster closer collaboration with these institutions since they are the birthplaces of innovation that can increase their competitiveness and innovation performance. Originality/value: This study found out that there was a limited study on the sources of innovation that firms in both countries rely on. This study therefore contributes to the literature on innovation in these countries.