Innovation and Performance: An Empirical Study of Russian Industrial Companies

Arkady Trachuk and Natalia Linder

Chapter 5 in Emerging Issues and Trends in Innovation and Technology Management, 2021, pp 101-124 from World Scientific Publishing Co. Pte. Ltd.

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.

Keywords: Radical Innovations; Innnovation Development Methods; Lead User Workshop; Disruptive Innovaton; Uber; IoT Ecosystem; New Product Development; Cross-industry Innovation; Boundary Spanning; Agile-Stage-Gate Hybrid Model (search for similar items in EconPapers)
JEL-codes: O31 O32 O33 O36 (search for similar items in EconPapers)
Date: 2021
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