Knowledge and Innovation differences in Baltic Countries

By using a panel of the Community Innovation Survey (CIS) data based on the Oslo Manual (OECD, 2005) which gives methodological guidelines and defines the innovation concepts, this work contributes to the literature on knowledge and innovation (i.e de Felice et al, 2012; Landry et al., 2002; Barrutia and Echebarria, 2010). We investigate how the channels of knowledge transfer create different kinds of innovation (product, process, marketing, organizational) with reference to the manufacturing sector. The aim of this paper is to observe the relationship between Baltic countries- Estonia, Latvia and Lithuania. These countries present common features and a similar history as they regained their independence from the Soviet Union in the early nineties before joining the EU in 2004 and more recently in 2011 the euro area (Poissonier, 2017). In addition, they show major similarities in terms of geography, size, economic structure. In terms of economic structure, these countries have undergone many transformations over the past year- particularly in the industrial sector, in which an important role is played by external geographic market compared to their small economies.