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Innovation, Adoption, Ownership, and Productivity: Evidence from Ukraine

Author

Listed:
  • J. David Brown
  • John S. Earle
  • Hanna Vakhitova
  • Vitaliy Zheka

Abstract

How do new and foreign firms achieve superior productivity? Do they conduct more and better R&D? Or do they distinguish themselves through computerization and organizational capital? We investigate the determinants of and returns to several types of investment, using a panel of over 40,000 Ukrainian industrial firms in 2000-2007. Foreign firms engage in more non-technological investment and IT and less in R&D than domestic private firms. Similarly, new firms invest more in non-technological capital and IT and less in R&D than initially state-owned firms. Productivity gains from R&D and non-technology investment are insignificantly different across ownership types, whereas foreign firms achieve much higher returns to IT investment than other firms. These results suggest that foreign firms outperform others via organizational capital that is better able to exploit IT investment. New firm productivity growth is a result of higher investment volume rather than investment efficiency.

Suggested Citation

  • J. David Brown & John S. Earle & Hanna Vakhitova & Vitaliy Zheka, 2010. "Innovation, Adoption, Ownership, and Productivity: Evidence from Ukraine," ESCIRRU Working Papers 18, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwesc:diwesc18
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    File URL: https://www.diw.de/documents/publikationen/73/diw_01.c.353280.de/diw_escirru0018.pdf
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    Cited by:

    1. Correa, Paulo & Andres, Luis & Borja-Vega, Christian, 2013. "The impact of government support on firm R&D investments : a meta-analysis," Policy Research Working Paper Series 6532, The World Bank.
    2. Brown, David J. & Earle, John S. & Telegdy, Almos, 2016. "Where does privatization work? Understanding the heterogeneity in estimated firm performance effects," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 329-362.

    More about this item

    Keywords

    R&D; information technology; foreign ownership; transition; Eastern Europe; Ukraine;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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