International and domestic external knowledge in the innovation performance of firms from transition economies: The role of institutions Articles uri icon

publication date

  • March 2022

start page

  • 1

end page

  • 13

volume

  • 176

International Standard Serial Number (ISSN)

  • 0040-1625

Electronic International Standard Serial Number (EISSN)

  • 1873-5509

abstract

  • In this study, we analyze how the acquisition of domestic and international external knowledge contributes to the
    innovation performance of firms in transition economies and how the institutional conditions of the home
    country may affect these relations. We test our hypotheses via the responses of 645 firms from 18 Central and
    Eastern European countries. Our findings show that both external knowledge sources—domestic and international—
    contribute positively to the number of new products in transition economies. Our results also indicate
    that a country"s governance imperfections positively moderate the relations between both domestic and international
    external knowledge and the number of new products. Additionally, our findings highlight that the
    benefits of international external knowledge for product innovation are greater in contexts with weaker institutional
    conditions than in environments with stronger institutional conditions. In contrast, the benefits of domestic
    external knowledge for product innovation do not vary substantially between scenarios with stronger
    institutional conditions and those with weaker ones. These findings lead us to conclude that the institutional
    conditions of transition economies moderate the relation between domestic and international external knowledge
    and innovation performance differently, with international external knowledge proving particularly valuable
    for product innovation when these conditions are weak.

keywords

  • innovation; external knowledge; institutional development; transition economies