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What High-Tech Companies in Russia Grow Faster and Why?

Author

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  • Zemtsov, S.

    (Russian Presidential Academy of National Economy and Public Administration, Moscow, Russia)

  • Chernov, A.

    (Moscow Institute of Physics and Technology, Moscow, Russia)

Abstract

The study aims to identify domestic, industry and regional growth factors for high-tech companies in Russia in 2010-2014 during economic growth decline. Econometric calculations are based on a sample of seven thousand firms of the five most technologically advanced industries: pharmaceuticals, aerospace, medical equipment, computer and information technology. According to the results of foreign studies and sample analysis, we formulate several hypotheses. As a result, the growth of technology firms in Russia primarily depends on the basic factors: firm's age and size (negative impact), capital and labor growth (positive impact). Start-ups, when processes become more complex and equipment deteriorates, must be ready to slow down growth rates regardless of increase in employment and investment. However, two factors have been identified, that contribute to maintaining high growth rates: access to international markets and entry into the state corporation. These factors determine the company's value-added chains switching in and the company's access to permanent sales markets; in the second case it is also the public defense procurement. The impact of foreign owners and intangible assets on the growth has not been identified. Regional conditions (access to human capital, markets and technologies), with a correct assessment, do not affect the firms' growth, as they already operate in the regions with the most favorable conditions: Moscow, St. Petersburg, Moscow and Samara regions, Tatarstan. In conclusion, a number of tools to support high-tech companies are proposed, aimed at upgrading fixed assets, improving access to qualified personnel, supporting export, technological innovation, and shaping entrepreneurial ecosystems.

Suggested Citation

  • Zemtsov, S. & Chernov, A., 2019. "What High-Tech Companies in Russia Grow Faster and Why?," Journal of the New Economic Association, New Economic Association, vol. 41(1), pages 68-99.
    • Handle: RePEc:nea:journl:y:2019:i:41:p:68-99
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    2. Zemtsov, S., 2022. "Technological entrepreneurship as a development factor of Russia," Journal of the New Economic Association, New Economic Association, vol. 53(1), pages 212-223.
    3. Stepanova, A. & Podukhovich, D., 2023. "CEO decision-making horizon and R&D investments. Evidence from Russia," Journal of the New Economic Association, New Economic Association, vol. 59(2), pages 85-118.

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    More about this item

    Keywords

    firm's growth; high technology; intangible assets; innovation; export; state corporation; Gibrat law; intrapreneurship; multi-level modeling; defense industry;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General

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