2019 (16), №3

Influence of Innovative Activity on the Productivity of Enterprises in Transition Economies



For citation: 

Nagieva, K. M. (2019). Influence of Innovative Activity on the Productivity of Enterprises in Transition Economies. Zhurnal Economicheskoj Teorii [Russian Journal of Economic Theory], 16(3), 587-592


The aim of this paper is to assess the impact of individual and averaged local innovations on enterprises productivity. The following basic hypothesis has been put forward: the firms located in cities (regions) with a favorable innovation environment tend to be more productive. The Business Environment and Enterprise Performance Survey (BEEPS) by countries in transition from 2012 to 2014 has been used for the analysis. The ordinary least squares method has been applied to test the hypothesis. Two dimensions of innovations have been used: individual and averaged for firms in the same location (city) within one country. This has been done in order to mitigate the problem of endogeneity associated with a possible reverse causality between innovation and productivity. The results have shown that the innovative activity of firms (both individual and local) leads to an increase in the competitiveness of firms, and the average local innovations have a stronger effect on the total factor productivity compared to the individual ones. This suggests the benefits of geographic concentration of innovations, as well as the need to improve innovation policy measures in the countries studied, in particular, to create conditions for effective interaction of firms in innovative activities.

PDF full
Downloaded: 29

Karina Mahir-kyzy Nagieva — Post-graduate Student at the Department of Econometrics and Statistics, Research Assistant, Ural Federal University named after the First President of Russia B. N. Yeltsin (Ekaterinburg, Russian Federation; e-mail: nagieva1995@list.ru).

Acosta, M., Coronado, D., & Romero, C. (2015). Linking public support, R&D, innovation and productivity: New evi- dence from the Spanish food industry. Food Policy, 57, 50–61.

Bartz, W., Mohnen, P., & Schweiger, H. (2016). The role of innovation and management practices in determining firm productivity in developing economies. European Bank for Reconstruction and Development, WP, 5–188.

Crépon, B., Duguet, E., & Mairesse, J. (1998). Research Investment, Innovation and Productivity: an Econometric Analysis at the Firm Level. Economics of Innovation and New Technology, 7(2), 115–158.

Dabla-Norris, E., Kersting, E. K., & Verdier, G.(2012). Firm Productivity, Innovation, and Financial Development. Southern Economic Journal, 79(2), 422–449.

Fisman, R., & Svensson, J. (2007). Are Corruption and Taxation Really Harmful to Growth? Firm Level Evidence. Journal of Development Economics, 83(1), 63–75.

Godin, B. (2008). Innovation: The History of a Category. Project on the Intellectual History of Innovation (Working Paper No. 1), 1–67.

Hall, B. H., Lotti, F., & Mairesse, J. (2013). Evidence on the impact of R&D and ICT investments on innovation and pro- ductivity in Italian firms. Economics of Innovation and New Technology, 22(3), 300–328.

Lehtoranta, O. (2010). Innovation, Collaboration in Innovation and the Growth Performance of Finnish Firms. VTT Technical Research Centre of Finland & Statistics Finland, 729, 1–136.

Smith, K. (2011). The Innovation and Research Strategy for Growth. BIS ECONOMICS, 15, 1–151.

Teplykh, G. V. (2018). Innovations and productivity: the shift during the 2008 crisis. Industry and Innovation, 25(1), 53–83.