Does training explain innovation in transition economies?
Cespic Working Paper 2023/01
Antonella Biscione, Chiara Burlina, Raul Caruso
Training has generally been linked to firm’s innovation propensity, but evidence remains sparse on the role of different typologies of training for firms in transition economies. Using a unique sample from the World Bank Enterprise Surveys (wave 2018-2020), we test the effect of training programs on innovation in 27 countries of Eastern Europe and Central Asia. We test several definitions of training, and our results show that both product and process innovations benefit from all the proposed activities. To validate our findings, we employ a specific instrumental variable approach by applying the Lewbel’s special regressor technique, whose outcome confirms our baseline results. Our contribution is twofold: first, we exploit a new database for transition countries that fill the gap in the literature on training programs also in these economies; second, for a policy perspective, we highlight the need to invest and promote training to boost innovation capacity of firms in these countries to reach the level of developed economies.
