Analysis of the determinants of innovation in enterprises in Kazakhstan

Nowadays, with rapid changes in the business world, companies around the world are increasingly incorporating innovation as one of their strategies to ensure business expansion and profitability. This study examined the determinants of firm innovation in Kazakhstan. The data used in this study was taken from a survey of businesses conducted by the world Bank (WBES) in Kazakhstan between January and October 2019, which were analyzed using the probit and tobit regression models. The Kazakhstan survey of enterprises is nationally representative and was conducted randomly among 1,369 enterprises, mainly in the manufacturing sector. The results of the study showed that the age of the firm, formal training, the size of the firm, the status of the exporter, the type, sector or activity of the firms-all this has a positive effect on the firm’s propensity to innovate. However, the study found that competitors in the market and the region of activity of enterprises mainly negatively affect the chances of innovation. It was also found that almost the same factors (foreign participation, formal training, firm size, type, and sector) are significant determinants of product, technology, R&D, or ICT innovations. Thus, the conclusions of this paper are that firms should make significant factors their top priorities in their quest to drive innovation. The results obtained can be applied by enterprises to build an effective strategy for innovative development of their business, as well as by government agencies to build policies aimed at stimulating innovative behavior.

innovations, enterprises, determinants, probit model, tobit model, econometric analysis

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