Innovation in the Wholesale and Retail Sectors in the Czech Republic 2008-2014

This paper focuses on the innovation activities of Czech wholesale and retail companies between 2006 and 2014. Based on data from four Czech Innovation Surveys (2008, 2010, 2012 and 2014), 1,630 observations were made about companies in the trade sector. The subsequent estimations are based on the structural modelling of the innovation process, i.e. decision to innovate, innovation input and innovation output. The size of a company was found to increase the probability of engagement in new-to-the-market innovation, however, no statistically significant relationship could be established for the intensity of innovation input or output. Being part of a group of companies was found to be a positive contributor to innovation activities, in particular in the first stage (decision, R&D input) of the innovation process. Significant differences were also found between the manufacturing and trade sectors in terms of market orientation. Having a national market focus was found to be linked to an increased probability of innovation, with a broader market focus proving not to be a significant factor during the analysed period. The trade sector was also found to engage in more types of innovation activities (processes, logistics and others), whereby the direct link between innovation input and innovation output was found to be in product innovation. Product innovation was also the only type of innovation in this sector which directly contributed to sales of new-to-the-market goods and services per employee. However, innovation activities were dampened in times of economic crisis, but only in terms of lower sales of innovated goods and services. The decision to innovate remained on average unchanged in the period 2006-2012.