IDEAS home Printed from https://ideas.repec.org/a/wsi/ijitmx/v15y2018i03ns021987701850027x.html
   My bibliography  Save this article

Innovation and Performance: An Empirical Study of Russian Industrial Companies

Author

Listed:
  • Arkady Trachuk

    (Department of Management, The Financial University, Under the Government of the Russian Federation, 15 Ulica Verhnjaja Maslovka, Moscow 127083, The Russian Federation)

  • Natalia Linder

    (Department of Management, The Financial University, Under the Government of the Russian Federation, 15 Ulica Verhnjaja Maslovka, Moscow 127083, The Russian Federation)

Abstract

The paper investigates the relationship between investment in research and development (R&D), innovation expenses, and productivity of manufacturing companies. These empirical results have shown that innovation investments (1) improve the performance of industrial companies with the elasticity of 0.09; (2) innovation investment has an impact on the performance of the company, and the extent of this impact depends on the value of R&D investment and has a range of elasticity ranging from 0.03 (for low volumes of R&D investment) to 0.16 in high volumes of R&D investment; (3) the relationship between innovation investment and the growth of performance is nonlinear in nature and has a strong positive relationship only after a critical mass of innovation investment has been reached; (4) a significant role in the relationship of innovation investment and productivity is played by the features of the industry in which the company operates (the companies that operate in high-tech industries not only invest more in R&D and innovation but also have a better performance due to research and development); (5) companies of low-tech industries have a negative elasticity of innovation investment and productivity, which is due to the influence of unprofitable innovation investments (appropriability effect), i.e. additional profits from the investment are not significant.

Suggested Citation

  • Arkady Trachuk & Natalia Linder, 2018. "Innovation and Performance: An Empirical Study of Russian Industrial Companies," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 15(03), pages 1-22, June.
    • Handle: RePEc:wsi:ijitmx:v:15:y:2018:i:03:n:s021987701850027x
    DOI: 10.1142/S021987701850027X
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S021987701850027X
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S021987701850027X?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Zvi Griliches, 1998. "Comparing Productivity Growth: An Exploration of French and U.S. Industrial and Firm Data," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 157-186, National Bureau of Economic Research, Inc.
    2. Tone, Kaoru & Sahoo, Biresh K., 2003. "Scale, indivisibilities and production function in data envelopment analysis," International Journal of Production Economics, Elsevier, vol. 84(2), pages 165-192, May.
    3. Crepon, B. & Duguet, E. & Mairesse, J., 1998. "Research Investment, Innovation and Productivity: An Econometric Analysis at the Firm Level," Papiers d'Economie Mathématique et Applications 98.15, Université Panthéon-Sorbonne (Paris 1).
    4. Zvi Griliches, 1998. "Productivity and R&D at the Firm Level," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 100-133, National Bureau of Economic Research, Inc.
    5. Roderik Ponds & Frank van Oort & Koen Frenken, 2010. "Innovation, spillovers and university--industry collaboration: an extended knowledge production function approach," Journal of Economic Geography, Oxford University Press, vol. 10(2), pages 231-255, March.
    6. Criscuolo, Chiara & Haskel, Jonathan E. & Slaughter, Matthew J., 2010. "Global engagement and the innovation activities of firms," International Journal of Industrial Organization, Elsevier, vol. 28(2), pages 191-202, March.
    7. Zvi Griliches, 1984. "R&D, Patents, and Productivity," NBER Books, National Bureau of Economic Research, Inc, number gril84-1, March.
    8. Hall, Bronwyn H. & Mairesse, Jacques & Mohnen, Pierre, 2010. "Measuring the Returns to R&D," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 2, chapter 0, pages 1033-1082, Elsevier.
    9. Czarnitzki, Dirk & Hanel, Petr & Rosa, Julio Miguel, 2011. "Evaluating the impact of R&D tax credits on innovation: A microeconometric study on Canadian firms," Research Policy, Elsevier, vol. 40(2), pages 217-229, March.
    10. Hans Loof & Almas Heshmati, 2006. "On the relationship between innovation and performance: A sensitivity analysis," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 317-344.
    11. Dietmar Harhoff, 1998. "R&D and Productivity in German Manufacturing Firms," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 6(1), pages 29-50.
    12. Massimiliano Bratti & Giulia Felice, 2012. "Are Exporters More Likely to Introduce Product Innovations?," The World Economy, Wiley Blackwell, vol. 35(11), pages 1559-1598, November.
    13. Rachel Griffith & Elena Huergo & Jacques Mairesse & Bettina Peters, 2006. "Innovation and Productivity Across Four European Countries," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 22(4), pages 483-498, Winter.
    14. Bronwyn H. Hall & Nathan Rosenberg (ed.), 2010. "Handbook of the Economics of Innovation," Handbook of the Economics of Innovation, Elsevier, edition 1, volume 1, number 1.
    15. Antonio Musolesi & Jean-Pierre Huiban, 2010. "Innovation and productivity in knowledge intensive business services," Journal of Productivity Analysis, Springer, vol. 34(1), pages 63-81, August.
    16. Bruno Crepon & Emmanuel Duguet & Jacques Mairesse, 1998. "Research, Innovation And Productivity: An Econometric Analysis At The Firm Level," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 7(2), pages 115-158.
    17. Wakelin, Katharine, 2001. "Productivity growth and R&D expenditure in UK manufacturing firms," Research Policy, Elsevier, vol. 30(7), pages 1079-1090, August.
    18. Zvi Griliches, 1996. "The Discovery of the Residual: A Historical Note," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1324-1330, September.
    19. Zucker, Lynne G. & Darby, Michael R. & Furner, Jonathan & Liu, Robert C. & Ma, Hongyan, 2007. "Minerva unbound: Knowledge stocks, knowledge flows and new knowledge production," Research Policy, Elsevier, vol. 36(6), pages 850-863, July.
    20. Liu, Xiaohui & Buck, Trevor, 2007. "Innovation performance and channels for international technology spillovers: Evidence from Chinese high-tech industries," Research Policy, Elsevier, vol. 36(3), pages 355-366, April.
    21. Ariel Pakes & Zvi Griliches, 1984. "Patents and R&D at the Firm Level: A First Look," NBER Chapters, in: R&D, Patents, and Productivity, pages 55-72, National Bureau of Economic Research, Inc.
    22. Gary Jefferson & Bai Huamao & Guan Xiaojing & Yu Xiaoyun, 2006. "R&D Performance in Chinese industry," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 15(4-5), pages 345-366.
    23. Roper, Stephen & Love, James H., 2002. "Innovation and export performance: evidence from the UK and German manufacturing plants," Research Policy, Elsevier, vol. 31(7), pages 1087-1102, September.
    24. Ramani, Shyama V. & El-Aroui, Mhamed-Ali & Carrère, Myriam, 2008. "On estimating a knowledge production function at the firm and sector level using patent statistics," Research Policy, Elsevier, vol. 37(9), pages 1568-1578, October.
    25. Tether, Bruce S. & Tajar, Abdelouahid, 2008. "The organisational-cooperation mode of innovation and its prominence amongst European service firms," Research Policy, Elsevier, vol. 37(4), pages 720-739, May.
    26. Kuen‐Hung Tsai & Jiann‐Chyuan Wang, 2004. "R&D Productivity and the Spillover Effects of High‐tech Industry on the Traditional Manufacturing Sector: The Case of Taiwan," The World Economy, Wiley Blackwell, vol. 27(10), pages 1555-1570, November.
    27. Shyama V. Ramani & Mhamed-Ali El-Aroui & Myriam Carrère, 2008. "On estimating a knowledge production function at the firm and sectoral level using patent statistics," Post-Print hal-00365396, HAL.
    28. Maria Laura Parisi & Fabio Schiantarelli & Alessandro Sembenelli, 2002. "Productivity, Innovation Creation and Absorption, and R&D: Micro Evidence for Italy," Boston College Working Papers in Economics 526, Boston College Department of Economics.
    29. Iulia Siedschlag & Xiaoheng Zhang, 2015. "Internationalisation of firms and their innovation and productivity," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 24(3), pages 183-203, April.
    30. Savona, Maria & Steinmueller, W. Edward, 2013. "Service output, innovation and productivity: A time-based conceptual framework," Structural Change and Economic Dynamics, Elsevier, vol. 27(C), pages 118-132.
    31. Siedschlag, Iulia & Zhang, Xiaoheng & Cahill, Brian, 2010. "The Effects of the Internationalisation of Firms on Innovation and Productivity," Papers WP363, Economic and Social Research Institute (ESRI).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mengning He & Raquel Pérez Estébanez, 2023. "Exploring the Relationship between R&D Investment and Business Performance—An Empirical Analysis of Chinese ICT SMEs," Sustainability, MDPI, vol. 15(6), pages 1-17, March.
    2. Olusesan Michael Awoleye & Olugbenga Matthew Ilori & Timothy Oyedepo Oyebisi, 2019. "SOURCES OF INNOVATION CAPABILITY AND PERFORMANCE OF ICT AGGLOMERATED MSMEs IN NIGERIA," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 24(04), pages 1-33, June.
    3. G. G. Nalbandyan, 2019. "Internationalization Strategies Of Russian Non-Energy Companies," Strategic decisions and risk management, Real Economy Publishing House, vol. 10(1).
    4. Deepak Chandrashekar & M. H. Bala Subrahmanya & Kshitija Joshi & Tathagat Priyadarshi, 2019. "Effect of Innovation on Firm Performance — The Case of a Technology Intensive Manufacturing Cluster in India," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 16(07), pages 1-31, November.
    5. Sara Picas & Pedro Reis & António Pinto & José Luís Abrantes, 2021. "Does Tax, Financial, and Government Incentives Impact Long-Term Portuguese SMEs’ Sustainable Company Performance?," Sustainability, MDPI, vol. 13(21), pages 1-16, October.
    6. Kseniia Boiko, 2022. "R&D activity and firm performance: mapping the field," Management Review Quarterly, Springer, vol. 72(4), pages 1051-1087, December.
    7. Yu. V. Volodin & P. A. Podkovyrov, 2018. "International Market Expansion," Strategic decisions and risk management, Real Economy Publishing House, issue 4.
    8. Wang, Nannan & Gong, Zheng & Xu, Zhuhuizi & Liu, Zhankun & Han, Yu, 2021. "A quantitative investigation of the technological innovation in large construction companies," Technology in Society, Elsevier, vol. 65(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2018. "Internationalisation, innovation and productivity in services: evidence from Germany, Ireland and the United Kingdom," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 154(3), pages 585-615, August.
    2. Bettina Peters & Rebecca Riley & Iulia Siedschlag & Priit Vahter & John McQuinn, 2014. "Innovation and Productivity in Services: Evidence from Germany, Ireland and the United Kingdom," JRC Working Papers on Corporate R&D and Innovation 2014-04, Joint Research Centre.
    3. Audretsch, David & Hafenstein, Marian & Kritikos, Alexander S. & Schiersch, Alexander, 2018. "Firm Size and Innovation in the Service Sector," IZA Discussion Papers 12035, Institute of Labor Economics (IZA).
    4. Hall, B.H., 2011. "Innovation and productivity," MERIT Working Papers 2011-028, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Pierre Mohnen & Bronwyn Hall, 2013. "Innovation and Productivity: An Update," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 3(1), pages 47-65, June.
    6. Ugur, Mehmet & Trushin, Eshref & Solomon, Edna & Guidi, Francesco, 2016. "R&D and productivity in OECD firms and industries: A hierarchical meta-regression analysis," Research Policy, Elsevier, vol. 45(10), pages 2069-2086.
    7. Montresor, Sandro & Vezzani, Antonio, 2015. "The production function of top R&D investors: Accounting for size and sector heterogeneity with quantile estimations," Research Policy, Elsevier, vol. 44(2), pages 381-393.
    8. Bronwyn Hall & Francesca Lotti & Jacques Mairesse, 2009. "Innovation and productivity in SMEs: empirical evidence for Italy," Small Business Economics, Springer, vol. 33(1), pages 13-33, June.
    9. Grigorii V. Teplykh, 2018. "Innovations and productivity: the shift during the 2008 crisis," Industry and Innovation, Taylor & Francis Journals, vol. 25(1), pages 53-83, January.
    10. Jarle Møen & Helge Sandvig Thorsen, 2017. "Publication Bias in the Returns to R&D Literature," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 8(3), pages 987-1013, September.
    11. Christophe Pennetier & Karan Girotra & Jürgen Mihm, 2019. "R&D Spending: Dynamic or Persistent?," Manufacturing & Service Operations Management, INFORMS, vol. 21(3), pages 636-657, July.
    12. Ortega-Argilés, Raquel & Piva, Mariacristina & Vivarelli, Marco, 2011. "Productivity Gains from R&D Investment: Are High-Tech Sectors Still Ahead?," IZA Discussion Papers 5975, Institute of Labor Economics (IZA).
    13. Baumann, Julian & Kritikos, Alexander S., 2016. "The link between R&D, innovation and productivity: Are micro firms different?," Research Policy, Elsevier, vol. 45(6), pages 1263-1274.
    14. Wadho, Waqar & Chaudhry, Azam, 2020. "Innovation Strategies and Productivity Growth in Developing Countries: Evidence from Pakistan," GLO Discussion Paper Series 466, Global Labor Organization (GLO).
    15. David B. Audretsch & Alexander S. Kritikos & Alexander Schiersch, 2020. "Microfirms and innovation in the service sector," Small Business Economics, Springer, vol. 55(4), pages 997-1018, December.
    16. Crespi, Gustavo & Zuniga, Pluvia, 2012. "Innovation and Productivity: Evidence from Six Latin American Countries," World Development, Elsevier, vol. 40(2), pages 273-290.
    17. Stiebale, Joel & Reize, Frank, 2011. "The impact of FDI through mergers and acquisitions on innovation in target firms," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 155-167, March.
    18. Jianhua Zhang & Mohammad Shahidul Islam, 2020. "The Heterogeneous Impacts of R&D on Innovation in Services Sector: A Firm-Level Study of Developing ASEAN," Sustainability, MDPI, vol. 12(4), pages 1-22, February.
    19. Busom, Isabel & Vélez-Ospina, Jorge Andrés, 2017. "Innovation, Public Support, and Productivity in Colombia. A Cross-industry Comparison," World Development, Elsevier, vol. 99(C), pages 75-94.
    20. Subal Kumbhakar & Raquel Ortega-Argilés & Lesley Potters & Marco Vivarelli & Peter Voigt, 2012. "Corporate R&D and firm efficiency: evidence from Europe’s top R&D investors," Journal of Productivity Analysis, Springer, vol. 37(2), pages 125-140, April.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wsi:ijitmx:v:15:y:2018:i:03:n:s021987701850027x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/ijitm/ijitm.shtml .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.