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

Stepan Zemtsov and A. Chernov
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A. Chernov: Moscow Institute of Physics and Technology, Moscow, Russia

Journal of the New Economic Association, 2019, vol. 41, issue 1, 68-99

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.

Keywords: firm's growth; high technology; intangible assets; innovation; export; state corporation; Gibrat law; intrapreneurship; multi-level modeling; defense industry (search for similar items in EconPapers)
JEL-codes: C51 L25 L6 R30 (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (3)

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