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Public Support for Innovation in Russian Firms: Looking for Improvements in Corporate Performance Quality

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  • Yuri Simachev
  • Mikhail Kuzyk
  • Vera Feygina

Abstract

This research focuses on the efficiency of Russia’s policy to foster innovation. We conduct an empirical analysis of how policy instruments impact firms’ behavior. The analytical data are obtained from a survey of more than 650 Russian industrial firms in 2012. The analysis shows that state support for innovation clearly targets successful companies and does not target laggard or insider (i.e., partially state-owned) firms. Comparing innovation effects on firms with and without state support, we found no strong improvement in corporate performance as a result of state-supported innovation. A significant positive correlation with state support existed for only one characteristic of firm performance: export volume. Considering specific effects of tax incentives and public subsidies on companies’ innovation behavior, we found out that direct public funding was more likely to mitigate risk and facilitate the launch of new innovative projects. Simultaneously, both tools lead to public funds crowding out private funds. Copyright International Atlantic Economic Society 2015

Suggested Citation

  • Yuri Simachev & Mikhail Kuzyk & Vera Feygina, 2015. "Public Support for Innovation in Russian Firms: Looking for Improvements in Corporate Performance Quality," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 21(1), pages 13-31, March.
    • Handle: RePEc:kap:iaecre:v:21:y:2015:i:1:p:13-31:10.1007/s11294-014-9509-5
    DOI: 10.1007/s11294-014-9509-5
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    Cited by:

    1. Edina Berlinger & Anita Lovas & Péter Juhász, 2017. "State subsidy and moral hazard in corporate financing," Central European Journal of Operations Research, Springer;Slovak Society for Operations Research;Hungarian Operational Research Society;Czech Society for Operations Research;Österr. Gesellschaft für Operations Research (ÖGOR);Slovenian Society Informatika - Section for Operational Research;Croatian Operational Research Society, vol. 25(4), pages 743-770, December.
    2. Cátia Rosário & Celeste Varum & Anabela Botelho, 2022. "Impact of Public Support for Innovation on Company Performance: Review and Meta-Analysis," Sustainability, MDPI, vol. 14(8), pages 1-16, April.
    3. Liu, Rebecca & Rammer, Christian, 2016. "The contribution of different public innovation funding programs to SMEs' export performance," ZEW Discussion Papers 16-078, ZEW - Leibniz Centre for European Economic Research.

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    More about this item

    Keywords

    Innovation; Firm behavior; Tax incentives; Public subsidies and grants; Government innovation policy; D21; L25; O10; O31; O57;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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