engleski

Does Innovation Matter for SMEs' growth in Croatia?

Small and medium sized enterprises (SMEs) account for about 99% of all enterprises in Croatia as well as in the EU economy. In most industries, SMEs attribute to much of the capital stock, employment, and a significant fraction of innovations. Among all SMEs, those that are growth-oriented make the most tangible contribution to economic growth. This is the reason why it is especially important to understand how SMEs grow. Numerous research studies are devoted to investigating factors related to growth. They have usually been understood in terms of three main categories: the entrepreneur, the enterprise and the environment. Among factors of growth on the side of the enterprise, one that is frequently reported in articles is innovation. However, the question is whether innovation necessarily leads to growth. The aim of this research is to investigate the relationship between high growth and innovation. Dataset for this research consists of 181 SMEs from Croatia. Empirical analysis in this research has been conducted in four stages. In the first stage, SMEs that have come out as innovative are compared with SMEs that are not innovative. Differences exist in human capital, profitability, exports, market and strategic orientation, novelty of technology and products. The second stage included comparison between growing SMEs and non-growing SMEs. Growing SMEs are younger, invest less in long-term assets and have lower barriers regarding capital availability. Also, they use newer technologies and they are more financed from internal resources. Comparison between growing SMEs that have come out as innovative and growing SMEs that have not come out as innovative shows differences in novelty of products and technology used, exports and aspiration for growth of employees. The final stage of the research covered development of a model for growth estimation by using factor analysis and logistic regression in order to estimate probability of an SME achieving growth and to identify factors that influence growth. It has been shown that the variable indicating existence of innovation in the enterprise is not present among factors that influence growth. This research raises the question of understanding innovations, as well as what types of innovative enterprises really exist in Croatia.

high growth, high growth estimation, high growth SMEs, innovation, logistic regression

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