Predictive Modeling of Innovation Capability in a Regional Context

Development of the innovation capability represents activities that enable transformation of firms and the regional entity toward improved competitiveness. The main goal of the paper is to model situation with regard to innovation capability in a regional context. The research confirms positive relations between networking, marketing, and knowledge absorption capability, between knowledge absorption, development, and business renewal capability, and between marketing and development capability. Instead, relations between networking and development capability, and between marketing and knowledge absorption capability are not confirmed. Furthermore, the study supports usefulness of partial least squares structural equation modeling as a decision-making supporting tool.