The influence of financial limitations and intellectual property rights protection: Evidence from 15 transitioning european countries

Abstract

In the framework of medium-scale transitioning economies and emerging markets in 15 different countries, this research evaluates the effect that financial limitations and intellectual property rights (IPR) protection on the corporate innovation and development of firms.We use panel data and a two-step Probit model combined with instrumental variable (IV) estimation to clarify how firms’ innovation activities are affected by IPR protection and budgetary limitations. The results reveal that financial constraints have a negative impact on both the creation of new products and process improvements. In contrast, IPR protection was found to create short-term barriers to the commercialization of new products while simultaneously fostering investments in research and development activities (R&D), which serves as a catalyst for long-term, sustainable innovation.