Economists Assessed the Impact of Innovations on the Exports of Russian Firms

14:05, November 29, 2023

It turned out that the combination of the three types is more favorable for firms than innovations separately

UrFU researchers assessed the impact of different types of innovation and staff training on the share of exports in the sales of industrial firms in Russia. The analysis showed that the combination of organizational innovations with other types of innovations leads to higher returns to R&D and exports. The results of the study were published in the journal Post-Communist Economies. The research was supported by the Russian Science Foundation (project No. 19-18-00262).

"Russia has low indicators in terms of the share of high-tech exports, partly due to the continued dependence of exports on raw materials. Nevertheless, in the context of geopolitical threats, innovations are becoming increasingly important for diversifying the structure of Russia's exports and improving the competitiveness of enterprises. Therefore, the study of the relationship between the innovation process and the export activities of enterprises is relevant and allows us to develop measures for the development of R&D and innovation in the country," explains Oleg Mariev, co-author of the study and Head of the Department of Economics at UrFU.

The Business Environment and Enterprise Performance Survey was used for the empirical evaluation. The sample included 1,329 industrial enterprises from all federal districts of Russia.

"We consider both individual firm characteristics and external factors of the business environment, including barriers to activity, human capital, and government support. To account for the relationship between R&D intensity, innovation adoption, and export performance, we applied and modified the CDM model. We extended the model by adding a variety of factors and by considering product, process, marketing, and organizational innovations both separately and in combination," adds Oleg Mariev.

The estimation of the modified CDM model showed that the combination of the three types of innovations is more profitable for firms than the introduction of innovations separately. For example, firms that implement product, marketing, and organizational innovations together export 4.2% more than other firms, all else being equal. At the same time, the complementation of organizational innovations with other ones increases the return on R&D investment by more than twice as much as implementing innovations separately. Moreover, all types of innovations and their combinations are known to have a positive and significant impact on the export share.

"R&D investment was found to be most effective for some combinations of innovation types where organizational innovation was present. This confirms our hypothesis that organizational innovation accompanies all other types of innovation. We also confirmed the hypothesis about the positive impact of employee training on the probability of implementing all types of innovations and, consequently, on the share of exports," says Karina Nagieva, researcher at the Laboratory of International and Regional Economics of the UrFU. 

Anna Marinovich

The news article was translated by UrFU International Marketing Office.
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