Original scientific paper
https://doi.org/10.22598/iele.2025.12.1.3
THE EFFECT OF GOVERNMENT SUPPORT ON INTERNATIONAL R&D COLLABORATION IN CENTRAL AND EASTERN EUROPE
Davor Vlajčić
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
*
Maja Bašić
orcid.org/0000-0002-1842-7091
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
Mile Bošnjak
; Faculty of Economics and Business, University of Zagreb, Zagreb, Croatia
* Corresponding author.
Abstract
Political and economic convergence presents a main goal of European Commission agenda. Despite huge transformation efforts, historical heritage of old socialist members presents an obstacle on this path. This is especially evident in stagnant innovation system. Leveraging global knowledge stock and collaboration with foreign technology partners should be the main source of accelerated convergence. Policymakers have recognized the importance of foreign partnerships, thus, they have introduced numerous government support mechanism to straighten innovation and business climate. In CEE (Central and Eastern Europe), introducing tax incentive and direct subsidies has been the main instrument for lowering cost of research activities, and attraction of foreign partners. Question arises whether have CEE countries succeed in attracting enough foreign knowledge to liberate themselves from the production of low added value products. This research was done on the sample of seven CEE countries, using Panel Vector Autoregressive model. Results of this research indicate that government efforts leave ambiguous effect on international cooperation. While direct government funding is negatively correlated, tax incentive is positively correlated with international cooperation. This reveals that in spite CEE government increased efforts in creating positive innovation environment, they have only partially succeeded in abandoning old innovation loop focused mostly on internal capabilities.
Keywords
CEE countries; international collaboration; tax incentive; direct subsidy; innovation system
Hrčak ID:
332614
URI
Publication date:
24.6.2025.
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