R&D Investment and Competitive Advantage in the Baltic States

Vaida Pilinkiene


Purpose. This paper addresses the issue of how R&D investment should create the competitive advantage among the firms in the Baltic States and what are the main obstacles for that.

Methodology. The paper develops a framework for analysing the relationship between R&D investment and competitive advantage. The research applies the methods of statistical analysis and econometric techniques.

Results. The empirical findings have implications both for managers and researchers. For managers there does appear to be increasing return to R&D investment and ability to compete globally; for researchers important to know the value mechanism of R&D investment. The analysis of the Baltic States has revealed quite different situation and policy regarding the R&D investment and possible return.

The theoretical contribution. Most theories emphasize the importance of R&D investment in the creation and development the country's competitive advantages. Each country has its own unique characteristics, with different resources and opportunities to use them for increasing competitiveness. Use of resources for R&D investment is much more efficient together with a proper identification of industry sectors, formation of priorities for R&D investment. The theoretical framework for analysing the relationship between R&D investment and competitive advantage helps better understand the way to develop and exploit firm’s innovative capabilities as a critical determinant of firm performance.

Practical implications (if applicable). Economic policy should focus on promoting R&D investment in order to compete globally and foster economic growth in the Baltic States.

Keywords: R&D investment, competitive advantage, Baltic States.

Paper type: Research paper.



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