R&D Activities as a Growth Factor of Foreign-Owned SMEs in Croatia

The aim of this paper is to explore the role of R&D activity as a factor of innovation and growth in foreign-owned SMEs in Croatia. In this paper, we try to confirm the hypothesis that there is a significant statistical difference (measured by the chi-square test) between high-growth foreign-owned SMEs and low-growth foreign-owned SMEs with regard to R&D activities. R&D activities are measured by annual expenditures on R&D and by the existence of R&D collaboration with external partners. In addition, the role of the firm as a source of technological knowledge for R&D activities and innovation for its partners is measured. The growth performance (i.e. increase of total revenues and number of employees) of foreign-owned SMEs in Croatia cannot be explained by R&D activities. However, a statistical difference has been observed in the case of high-growth SMEs as knowledge sources for foreign competitors