The relationship between the market structure, the firms size and their innovative activity in the sectors of the Russian economy: Experience in industry-specific competitive analysis

Abstract

A number of theoretical and applied studies have shown that there is no unambiguous relationship between the market structure, expressed in particular by the firms size, and firms innovation activity. Understanding the nature of the relationship between the market structure, the firms size and their behavior allows us to raise the level of justification for both business strategies and innovation policy, which is also relevant in the context of the digital transformation of the Russian economy. The paper is aimed at considering the problem of an influence of a market structure with due regard for the peculiarities of their industries on firms innovation activity in Russia for the period 2006–2016. This period was chosen due to the transition to a new Russian National Classifier of Economic Activities edition and the beginning of active Russian economy digitalization in 2017. The hypothesis of the study is that in Russia, under the impact of a number of events, the influence of the firms size on their innovative activity in various sectors of the economy is becoming more acute. By building pooled and panel data models it was shown, that at the studied stage of country development a positive relationship between the average firms size in the industry and their innovation activity can be observed. But some conditions for a stronger growth of innovation activity in industries with firms of smaller sizes are emerging and it indicates a change in the Russian economy structure. As a result of assessing the linkage of the innovation activity intensity and firm size, it can be concluded that there is no connection with belonging to the type of economic activity, i. e. the relationship between the share of costs for technological innovations and the size of firms in the Russian economy has no industry specifics. The further development of this study consist in a more study of the factors that determine the results obtained, the development of recommendations for the formation of a working innovation system in Russia, as well as in the field of antimonopoly regulation on the issue of entry barriers.