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Significant progress has been made in recent years in the development of enterprise policy in the Western Balkans. Issues remain, however, in the support provided for innovative enterprises. In this paper the authors use data from the 2005 Business Environment and Enterprise Performance Survey to identify the determinants of innovation in locally-owned firms in the Western Balkans and compare these to the other CEEE countries and the CIS. Based on an econometric examination of the innovation production function in each area they observe marked differences in the determinants of innovation.
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