Trade Openness and Innovation Performance in the EU: An Analysis of Cluster Dynamics

In the modern globalized context, innovation represents a key driver of economic growth, while international trade plays an important role in fostering it. This study examines the relationship between the degree of trade openness and innovation performance across 27 EU member states over the period 2018–2024. The period under review covers the COVID-19 pandemic. The data were analyzed using dynamic cluster analysis (K-means). In addition to simple linear regression, FE mixed-model analysis (REML) was also used to test the robustness of relationships. Dynamic cluster analysis from the perspective of trade openness and innovation identified three statistically significant and stable heterogeneous groups of countries—innovation leaders, emerging economies and countries with high economic openness. The mixed model included the variables trade-to-GDP, R&D expenditure, digitalization and GDP. The results confirmed a statistically significant positive relationship between trade openness and innovation performance in EU countries. The findings show a significant positive impact of Trade-to-GDP, digitalization and R&D expenditure (triple interaction) on innovation rates as a synergistic innovation effect. The findings highlight that the impact of trade openness on innovation is heterogeneous and conditioned by other specific factors, thus requiring differentiated innovation and trade policies within the European Union. Innovation policies should optimize all parameters influencing innovation and exploit their synergistic effect.