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Impact of economic crisis on innovation behaviour of industrial firms in Russia

Author

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  • Kuznetsov, Boris
  • Simachev, Yuri

Abstract

The paper focuses on empirical analysis of major factors that determine innovation activities of Russian manufacturing firms during the crisis. We presume that the crisis has ambiguous effects on firms’ behaviour, on one hand limiting their financial capabilities to invest into new products and/or technologies, and on the other hand – creating additional incentives to innovate and opportunities to enter new markets. We use micro-level data to reveal major determinants of changes in innovation activity of a firm, including structural characteristics (size, industry, etc.), competitive environment (intensity of competition and type of main competitors) , changes in financial position of a firm, it’s pre-crisis performance and innovation activity, the declared strategy of a firm and other factors. The empirical part of our research is based mostly on the results of two surveys of industrial firms conducted in August of 2008 (before the crisis) and in September 2009 (during the crisis). About 600 medium and large firms mostly in manufacturing industries have been surveyed using specially developed survey instruments. We show that while general impact of the crisis on innovation activity was strong and negative different industries have been damaged to different extent. The adjustment to the crisis led to sharp decrease in investment intensive innovations while R&D activity has diminished much less and for some groups of firms has even intensified. The drop in innovations is typical for firms pursuing the strategy of incremental improvements of technology and products or with the strategy of large-scale investments in enhancing the production of traditional goods, rather than for firms focused on the development of new products. We found further that about 30% of manufacturing firms during the crisis still pursued innovation based strategies and this behaviour does not is depend on industry or even financial position.

Suggested Citation

  • Kuznetsov, Boris & Simachev, Yuri, 2010. "Impact of economic crisis on innovation behaviour of industrial firms in Russia," MPRA Paper 43675, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:43675
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    References listed on IDEAS

    as
    1. Raj M. Desai & Itzhak Goldberg, 2008. "Can Russia Complete?," World Bank Publications, The World Bank, number 15816.
    2. Козлов К. К. & Соколов Д. Г. & Юдаева К. В., 2004. "Инновационная Активность Российских Фирм," Higher School of Economics Economic Journal Экономический журнал Высшей школы экономики, CyberLeninka;Федеральное государственное автономное образовательное учреждение высшего образования «Национальный исследовательский университет «Высшая школа экономики», vol. 8(3), pages 399-419.
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    Cited by:

    1. Golikova Victoria & Kuznetsov Boris, 2016. "The Role of Innovation and Globalization Strategies in Post-Crisis Recovery," HSE Working papers WP BRP 123/EC/2016, National Research University Higher School of Economics.

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    More about this item

    Keywords

    industrial innovation; impact of crisis; innovation policy;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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