The impact of innovation activities on firm performance using a multi-stage model: Evidence from the Community Innovation Survey 4

► We explore the drivers of innovation process in a number of West European and Central and East European countries. ► The database consists of about 90,000 firms in 16 countries. ► Results show differences in behaviour of firms in different institutional settings. ► Investment in innovation increases with firm size but innovation output decreases with firm size. ► Subsidies encourage spending on innovation but do not lead to additional innovation output.