The Nature of Innovation Channels at the Micro-Level: Evidence from Russian Manufacturing Firms

Simachev, Yuri and Kuzyk, Mikhail and Feygina, Vera (2013): The Nature of Innovation Channels at the Micro-Level: Evidence from Russian Manufacturing Firms.

Abstract

The main purpose of the paper is to analyze different channels for innovations. We analyze the influence of various incentives for innovation in Russian companies taking into account the organization of industries — vertical or horizontal orientation, peculiarities of corporate demography, role and motives of different owners (including government and foreign investors), demand trends, customers‘ profile, nature and intensity of competition in relevant markets. An empirical base for our study is provided by two surveys of Russian industrial companies conducted in 2011 and 2012. One of our hypotheses: in vertically organized sectors that define innovation activeness in the economy (for example, mechanical engineering), the innovative development of the head producers is constrained by the risk of technological gap with its partners in the supply chain. We find out that innovations in Russian industry spread in accordance with two main models: vertical through corporate connections, and horizontal, based on the example of foreign companies in the atmosphere of developed competition.

• Item Type: MPRA Paper
• Language: English
• Keywords: innovation, industrial organization, supply chain, innovation channels
• Subjects: D - Microeconomics > D2 - Production and Organizations > D22 - Firm Behavior: Empirical Analysis; L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives

References

Aghion, P., L. Bloom, R. Blundell, R. Griffith, and P. Howitt, 2005. Competition and Innovation: An Inverted U Relationship. Quarterly Journal of Economics, Vol. 120, No. 2, pp. 701-728.

Attalah, G., 2000. Vertical R&D Spillovers, Cooperation, Market Structure, and Innovation. CIREQ Working Paper 19.

Bessant, J., Kaplinsky R., and Lamming, R.,2003. Putting Supply Chain Management into Practice. International Journal of Operations & Production Management, Vol. 23, No. 2, pp. 167-184.

Blalock, G., Gertler, P. 2004. Welfare Gains from Foreign Direct Investment through Technology Transfer to Local Suppliers. Unpublished manuscript, Cornell University.

Camison-Zornoza, C., Lapiedra-Alcami, R., Segarra-Cipres, M., and Boronat-Navarro, M., 2004. A Meta-analysis of Innovation and Organizational Size. Organization Studies, Vol. 25, No. 3, pp. 331-361.

Cohen, W.M., Klepper, S., 1996. Firm Size and Nature of Innovation within Industries: the Case of Process and Product R&D. The Review of Economics and Statistics, Vol.78, No. 2, pp. 232-243.

Dent, R., 2001. Collective Knowledge Development, Organizational Learning and Learning Networks: an Integrated Framework, Economic Social and Research Council.

Gereffi, G., 1999. International Trade and Industrial Upgrading in the Apparel Commodity Chain. Journal of International Economics, Vol. 48, pp. 37–70.

Gereffi, G., Humphrey, J., and Sturgeon, T., 2005. The Governance of Global Value Chains. Review of International Political Economy, Vol. 12, No. 1, pp. 78-104.

Gorodnichenko, Yu., Svejnar, J., and Terell, K., 2010. Globalization and Innovation in Emerging Markets. American Economic Journal: Macroeconomics, Vol. 2, No. 2. pp. 194-226.

Hemphill, T.A., 2003. Cooperative Strategy, Technology Innovation and Product Development in Industrial Companies. International Journal of Production Economics, Vol. 69, pp. 169– 176.

Humphrey, J., Schmitz, H., 2002. How Does Insertion in Global Value Chains Affect Upgrading in Industrial Clusters? Regional Studies, Vol. 36, No 9, pp. 1017–1027.

Joshi, A.W., Sharma, S., 2004. Customer Knowledge Development: Antecedents and Impact on New Product Performance. Journal of Marketing, Vol. 68, pp. 47–59.

Kamien, M., Schwarz, N., 1972. Market Structure Rival‘s Response and the Firms‘s Rate of Product Improvement. The Journal of Industrial Economics, Vol. 20, No. 2. pp. 159-172.

Keesing, D., Lall, S., 1992. Marketing Manufactured Exports from Developing Countries: Learning Sequences and Public Support. In G.Helleiner, ed. Trade Policy, Industrialization and Development, Oxford University Press, pp. 176–93.

Kozlov, K., Sokolov, D., and Yudaeva, K., 2004. Innovatsionnya Aktivnost‘ Rossiyskikh Firm [Innovative Activity of Russian Firms]. Ekonomicheskiy Zhurnal VShE, No. 3, pp. 399-419 (in Russian).

Loury, G., 1979. Market Structure and Innovation. The Quarterly Journal of Economics, Vol. 93. No. 3, pp. 395-410.

Pietrobelli, C., Rabellotti, R., 2010. Global Value Chains Meet Innovation Systems: Are There Learning Opportunities for Developing Countries? IDB Working Paper Series.

Prahalad, C.K., Hamel, G., 1990. The Core Competence of the Corporation. Harvard Business Review, May-June, pp. 79-91.

Rindfleisch, A., 2000. Organizational Trust and Interfirm Cooperation: An Examination of Horizontal and Vertical Alliances. Marketing Letters, Vol. 11, No. 1, pp. 81-95.

Roper, S., Du, J., and Love, J.H., 2008. Modelling innovation value chain. Research Policy, Vol. 37, pp. 961-977.

Roy, S., Sivakumar, K., and Wilkinson, I.F. 2004. Innovation Generation in Supply Chain Relationships: A Conceptual Model and Research Propositions. Journal of the Academy of Marketing Science, Vol. 32, No.1, pp. 61-79.

RUIE (Russian Union of Industrialists and Entrepreneurs), 2011. Report on state of business climate at 2007-2011.

Scherer, F., 1967. Market Structure and the Employment if Scientists and Engineers. American Economic Review, Vol. 57, No. 3, pp. 524-531.

Schumpeter, J., 1942. Capitalism, Socialism and Democracy. Harper & Brothers Publishers, New York.

Simachev, Yu., Kuzyk, M., and Ivanov, D., 2012. Fostering Innovation Performance of Russian Manufacturing Enterprises: New Opportunities and Limitations. Foresight-Russia, Vol. 6, No. 2, pp. 18–41 (in Russian).

Sturgeon, T., 2002. Modular Production Networks: A New American Model of Industrial Organization. Industrial and Corporate Change, Vol. 11, No. 3, pp. 451–96.

Zasimova, L., Kuznetsov, B., Kuzyk, M., Simachev, Yu., and Chulok, A. Problems of Switching Industry to Innovation-Driven Path, Scientific Reports: Independent Economic Analysis Series, Paper No. 201, Moskovskiy Obshchestvennyy Nauchnyy Fond, Moscow, 2008 (in Russian).