Do investments impact on firms' innovation activities? Evidence from Poland and the Czech Republic

A significant driver of competitiveness is innovation. Here, particular emphasis is put on firms' innovation activities to enhance competitive advantage of firms and countries and regions. In this respect, special attention is put, among others, on investments made in the public and the business sector. Following this, it is important to explore whether investments influence positively on firms' innovation activities. In this regard, special attention was put on firms from Poland and the Czech as the countries with the same performance of innovation. Hence, the aim of this paper is to indicate whether investments impact on innovation activities of Polish and Czech firms. To study the Ordinary Least Squared regression was applied to hypotheses testing. The study was based on data from the European Innovation Scoreboard 2018. Here, in relation to investments, data from finance and support and firm investments dimensions were used: R&D expenditure in the public sector, venture capital, R&D expenditure in the business sector, non-R&D innovation expenditures, and enterprises providing training to develop or upgrade ICT skills of their personnel. The study referred to the period 2010-2015. This paper contributes to the existing literature by providing new insight on understanding the issues related to firms' innovation activities. The analysis indicates, among others, statistically significance of venture capital on Polish and Czech firms' innovation activities. The implication of this study is that there is a need to strengthen conditions especially for new business creation.