Barriers to Technological Innovation and International Market Orientation of Polish Manufacturing Enterprises

The aim of this paper is to assess the inluence of innovation barriers for technological innovation on the innovation performance as well as sales market orientation of Polish irms. The analysis is conducted on the sample of 7783 manufacturing enterprises participating in the survey GUS PNT–02/CIS for the years 2008–2010. The results show statistically signiicant relations between innovation barriers and both innovation performance and international market orientation of surveyed irms. Various advanced statistical methods were used in order to verify research hypotheses. The results of the study reveal complexity of interactions between analysed variables leading to the conclusion that innovation process cannot be reduced to linear relationships only. Bariery innowacji technologicznych i międzynarodowa orientacja rynkowa polskich przedsiębiorstw przemysłowych Abstrakt. Celem niniejszej pracy jest ocena wpływu barier innowacji technologicznych na sprawność innowacyjną i międzynarodową orientację rynkową przedsiębiorstw polskiego przemysłu przetwórczego. Analizę przeprowadzono na próbie n=7783 przedsiębiorstw, biorących udział w badaniu GUS PNT-02 za lata 2008–2010. Wyniki wskazują na statystycznie istotne zależności między barierami a sprawnością innowacyjną oraz orientacją rynkową badanych irm. W celu weryikacji hipotez badawczych, w badaniu zastosowano szereg zaawansowanych metod statystycznych. Wyniki wskazują na złożoność interakcji pomiędzy analizowanymi zmiennymi, prowadząc do wniosku, że proces innowacji nie może być zredukowany wyłącznie do relacji liniowych. Pobrane z czasopisma Annales H Oeconomia http://oeconomia.annales.umcs.pl Data: 19/11/2020 14:41:21


Introduction
Recent literature as well as business practices provide evidence that innovation is regarded as an essential tool for stimulating the growth of enterprises and economies. High risk and uncertainty are the features that distinguish innovation from activities connected with the routine management of the company. In this context, the aim of the paper is to examine the importance of innovation obstacles and their impact on innovation performance as well as on international market orientation of Polish manufacturing enterprises.
The paper is organised as follows. The irst part of the paper provides an overview of the literature and research hypotheses. The second part contains the sample description, methods applied and the operationalization of variables. In the third part, the results of the data analysis are presented. Conclusions, implications, and limitations of the research make up the inal section.

Overview of literature and hypotheses development
The irm-level studies reveal a positive relationship between innovation and international competitiveness (Halpern, 2007;Montobbio, 2003;Soete, 1981). Bleaney and Wakelin (2002) argue that non-innovating irms are more likely to be present with sales internationally if they have cost advantage, while innovating irms are more likely to export if they implement more innovations. Other studies show that the probability of exporting as well as the intensity of export are positively inluenced by R&D and successful innovations (Gourlay and Seaton, 2004). As for the impact of process innovation on irms export behaviour, no such strong evidence has been found (Clausen and Pohjola, 2009). However, it should be noted that majority of studies refer to mature economies where irms compete mostly based on differentiation rather than cost/price advantage, whereas irms' competitive strategies in CEE countries, including Poland, suggest that they still resemble many characteristics of cost/price advantage and their abilities to increase differentiation-based competitive advantage are still insuficient, although improving (Wziątek-Kubiak, Balcerowicz and Pęczkowski, 2009; Stojcic, Hashi and Telhaj, 2011). For the purpose of this paper, technological product and process (TPP) will be deined as technologically implemented new products and processes and signiicant technological improvements in products and processes (Oslo Manual, 2005, p. 31).
Given the results of the abovementioned studies, the irst research hypothesis is placed: H1. There is a positive relation between the product (H1a) and/or process (H1b) innovation and international market orientation of Polish manufacturing irms.
Determinants of innovation output, can be broadly divided into two groups: factors that enhance innovation performance and those that hamper innovation. In this article we will argue, following the proposal of Oslo Manual (2005), that innovation barrier is every factor that slows down or even prevents innovation activity. It can also adversely affect innovation activity to the extent that it does not bring in the expected results. Extended lists of different innovation barriers are presented in several research articles (Larsen and Levis, 2007;Guijrro-Madrid et al., 2009;Buse et al., 2010;Saatcioglu and Ozmen, 2010). Most often they are categorized according to resource / competence areas of irm resources; often they are grouped as internal and external ones. Larsen and Levis (2007) distinguish inancial and marketing skills shortages, as well as management and personal characteristic barriers and other barriers (such as long time of new product development, lack of external professional partners, lack of trust). Canadian Survey of Innovation and Advanced Technology (SIAT) divides impediments to advanced technology adoption into ive categories: cost-related; insti-tution-related; labour-related; organization-related and information-related (Baldwin and Lin, 2002). Similar list of internal and external barriers present Buse et al. (2010). Authors argue that without a thorough understanding of internal business processes and profound analysis of business environment, including both internal and external barriers, full usage of global opportunities that may strengthen innovation capabilities, is signiicantly limited. Different taxonomy is proposed by D'Este et al. (2012), as they divide innovation barriers into revealed barriers -those relecting the degree of dificulty of the innovation process and deterring barriers -seen by the irm as insurmountable.
Guijrro-Madrid et al. (2009) presents the impact of different innovation barriers on product, process and management innovation among Spanish irms. Process and management innovations are negatively inluenced by internal barriers -human resources and weak inancial position. At the same time, barriers originating from the environment inluence them positively. The importance of barriers to innovation in new product development process is raised by Larsen and Lewis (2007). Based on investigation of case studies of British irms awarded for "ground-breaking product innovation", Authors argue that enterprises are as likely to overcome the existing barriers, as to ignore them, meaning that both strategies may lead to success.
Complementarities between innovation barriers and their interactive effects are investigated in several articles from both streams of literature. Galia and Legros (2004) have found that the obstacles related to risk, cost and inance, organizational attitude, lack of speciic skills or information, and those related to the institutional environment and customer responsiveness are complementary for irms which postponed innovative projects, while for these which abandon projects, the group is much reduced and covers only barriers concerning risk, cost, inance, organizational attitude, skilled personnel, and technological information. Signiicant correlation between lack of inancial resources and excessive risk, high cost and cost dificult to control is found in many works (Guijrro-Madrid, 2009; Hewitt-Dundas, 2006; Galia and Legros, 2004).

H2. Innovation barriers adversely affect introduction of product (H2a) innovation and/or (H2b) process innovation within Polish manufacturing irms.
Having in mind the high probability of the link between innovation and international market orientation as well as the link between innovation barriers and innovation performance, the last hypothesis is proposed: H3. Innovation barriers negatively affect international market orientation of Polish manufacturing irms.

Sample characteristic and methods applied
The study uses the micro data from questionnaire PNT-02 (Polish version of Community Innovation Survey) for the period 2008-2010, conducted in Poland in 2011 by Central Statistical Ofice (GUS). The research covered the original sample of medium and big sized enterprises from Polish industry NACE section B (Mining and Quarrying); section C (Manufacturing); section D (Electricity, Gas, Steam, and Air Conditioning Supply) and section E (Water Supply, Sewerage, Waste Management, and Remediation Activity). Chi-square with column proportions was applied to verify statistically signiicant differences between distinguished clusters of Active Innovators (those who introduced product and/or process innovation in 2008-2010) and Non Active Innovators (p<0.05) ( Table 1). Within the sample of innovative irms 73.5% of them declare introduction of product innovation, 77.6% -the introduction of process innovation, nearly 40%marketing innovation and 48.3% -organisational innovation. Medium size irms constitute 67.4% of the sample and large irms 32.6%. The share of irms belonging to Polish owned capital groups accounts for 17.1%, whereas irms of foreign capital groups amounts to 22%. The remaining 60.9% irms in the sample are independent irms.
The explorative character of study inluenced the data analysis methods. To verify the relationship between the introduction of product and process innovation and sales orientation of surveyed irms, as well as relation between innovation barriers and innovation performance, logistic regression models (a type of probabilistic statistical classiication model used to predict a binary response from a binary predictor) were constructed.
In order to minimize the number of variables factor, Oblimin rotation with Kaiser normalization (Kaiser, 1958) was used. The reliability of the factor analysis results Pobrane z czasopisma Annales H -Oeconomia http://oeconomia.annales.umcs.pl Data: 24/12/2020 23:25:31 U M C S was proven with the Cronbach's α. Based on the analysis of critical values between parameters, a hierarchy of barriers determining innovation performance as well as international market orientation was established.

Results
Logistic regression results for the relationship between the implementation of innovation and sales destinations of irms will be broken down based on the market type into: "local market" (within the home country), "domestic (national) market"; EU, EFTA or EU candidate country ("EU/EFTA")" 1 and "other markets". Other logistic regression models will be constructed in order to investigate the inluence of inancial as well as market/knowledge related barriers on both the innovation activities and sales orientation of surveyed irms. Table 2. Results of logistic regression for the relationship between the introduction of product and process innovation and the sales market of Polish manufacturing enterprises, results for Active Innovators, n=2795

Type of innovation
Target market "Local market" "Domestic market" "EU, EFTA" "Other markets" Results of Table 2 show that there is a positive relationship between introduction of process innovation and sales on both EU markets (B=0.305***) and "other markets" (B=0.276***). The probability of being in a group of Polish irms selling on EU markets and "other markets" increases by a bit less than 150 percent (Exp(B)=1.357) (Exp(B)=1.318) with each additional indication for the process innovation. This leads to the conclusion that hypotheses H1b was supported, whereas H1a about the possible relation between product innovation and international sales orientation was rejected.
Factor analysis of innovation barriers using Oblimin rotation (KMO=0.895;  (details see Table 3). The group of "market/knowledge barriers" (InnoBarrMarkKnow) consists of such obstacles as: lack of information on technology, lack of information on markets, lack of qualiied personnel, dificulties in inding cooperation partner, market dominated by established irms, uncertain demand for innovative goods or services. The group of "inancial barriers" (InnoBarrFin) covers: lack of funds within irms or group', lack of inance from sources outside irm, and too high cost of innovation.
The relation between both inancial (InnoBarrFin) and market/knowledge (In-noBarrMarkKnow) related barriers and introduction of innovation show that they have signiicant impact on the introduction of both the product (InnoProd) as well as process innovation (InnoProc) by Polish irms. For both types of innovation, "market/knowledge related barriers" are more signiicant than "inancial barriers". Table 4 for details. The abovementioned results of logistic regression allows us to support hypotheses H2a and H2b. Table 5. Results of logistic regression for the relationship between the perception of inancial and market/ knowledge innovation barriers and the sales market, results of the whole sample, n=7783 Type of innovation barrier Target market "Local market" "Domestic market" "EU, EFTA" "Other markets" Another logistic regression model was built in order to verify the relation between both inancial (InnoBarrFin) and market/knowledge related barriers (InnoBarrMark-Know) and market orientation of irms. The results revealed that there is statistically a signiicant relation between inancial barriers and market orientation of surveyed irms; this also related to external markets. Based on the above, the hypothesis H3 has been supported for inancial barriers inluence. Details, see Table 5 above.

Conclusions, limitations, and implications
The obtained results do not conirm the re-orientation of Polish irms toward gaining differentiation-based international competitive advantage resulting from product innovation. It seems that surveyed irms still base their strategies on international markets on cost/price advantage resulting, among others, from introduction of process innovation.
The importance of inancial and market/knowledge related barriers for the introduction of both product and process innovation as well as international market orientation (in case of inancial barriers) show that there is a striking need for both improving inancial standing of irms as well as their knowledge base. Deeper analysis may reveal which type of inancial obstacles -those related to lack of inancial resources within the irm or those coming from external sources -are perceived as more important obstacles for both innovation performance and market orientation of Polish irms. Introduction of innovative inancial mechanisms (Błach, 2013), still rare in Polish economy, may result in strengthening of the irms innovation performance.
Certain limitations of the study provide opportunities for future research. The research setting is restricted to the medium and big sized enterprises and the results cannot be transferred towards the small irms, which still constitute the majority of Pobrane z czasopisma Annales H -Oeconomia http://oeconomia.annales.umcs.pl Data: 24/12/2020 23:25:31 U M C S Polish economy. The results are based on one wave of PNT-02 questionnaire, so the long-term analysis is much limited.
Nevertheless, the analysis provides some hints for further research of connections between innovation and market orientation as well as the impact of innovation barriers on both innovation performance and international competitive advantage of Polish irms.