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

J. David Brown (), John Sutherland Earle (), Ganna Vakhitova () and Vitaliy V. Zheka ()

No 18, ESCIRRU Working Papers from DIW Berlin, German Institute for Economic Research

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.

Keywords: R&D; information technology; foreign ownership; transition; Eastern Europe; Ukraine (search for similar items in EconPapers)
JEL-codes: D21 D24 F23 G34 L33 O32 P31 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-ino, nep-knm, nep-sbm and nep-tra
Date: 2010
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