Innovation in the CESEE region: from pre-crisis credit boom to the effects of the financial crisis

Client/Funding Institution

Anniversary Fund of the Oesterreichische Nationalbank


In Europe's Emerging Market Economies a change in the underlying growth and catching-up model of the last decades is becoming apparent. The proposed study was one of very few studies on developing and emerging economies in Central, East and Southeast Europe (CESEE) focusing on innovation activity in this region. It analysed drivers and effects of innovative activities at the firm level for a comprehensive set of countries in the CESEE region. The study looks at three phases of economic and financial development, namely ‘financial normalcy’ (2000-04), the emergence of the credit and housing ‘bubble’ (2004-08) and the ‘crisis’ (from 2008 onwards) and at two innovation strategies (make and buy) and analyses the role of (i) credit constraints as an impediment to innovation activities and success, of (ii) foreign-controlled enterprises and their potentially superior innovation and firm performance and of (iii) the strategic choice of R&D cooperation partners for innovation success.


July 2014 - December 2015

wiiw team Leader

Sandra M. Leitner

wiiw Staff

Michael Landesmann, Sandra M. Leitner, Robert Stehrer

Keywords: economic development, innovation, Central, East and Southeast Europe (CESEE)

Countries covered: Central, East and Southeast Europe

Research Areas: Macroeconomic Analysis and Policy, Regional Development