Грицук Софья Алексеевна
Innovative Strategies under Economic Distresses: Evidence from Russian Crises
Under the unfavourable economic conditions, companies need to quickly react to such an environment. However, the role of innovations in this process is insufficiently studied in terms of the Russian crises. The goal of the bachelor thesis is to explore innovative strategies of companies in Russia under the two consequent crises: the global financial and economic recession of 2008-2009 and the local politically driven crisis of 2014. In particular, the research specifically considers the internal factors of Russian companies, which lead to innovations, largely defined by the R&D investments and the number of patents published along with R&D outputs. The study provides the longitudinal panel data of the financial results for a period of 2008-2017 that enables to consider both crises of 2008-2009 and 2014. The empirical evidence is maintained to show the heterogeneity of the crises in terms of the industry specifics. Furthermore, the role of innovation in the period of each separate crisis in the particular Russian industries is also investigated. The methodology consists of the various regression models; the choice of each model has been explained in details in the subsection 3.3.2. Thus, the regression model with the fixed effect is used to consider the relationship between innovation-related variables and the performance of the Russian companies in general and in the period of the crises. Furthermore, the innovations are considered in terms of the input-output effect, which reveals the relationship with the performance as well. For that matter, the 3SLS regression model has been used to show the different levels. The main findings are the following. Firstly, R&D investments and the patents are positively significant in terms of operating revenue, EBIT and operating margin for both crises of 2008-2009 and 2014. Secondly, the patents have statistically bigger coefficients than R&D investments. Thus, R&D investments can be considered as the input of innovations as they are positively significant for the patents. Moreover, the crisis heterogeneity has been observed in terms of industries, meaning the different influence. Thus, the oil industry has been affected the most by the crisis of 2008-2009, and R&D investments positively influenced in such unfavorable conditions, proving the first hypothesis of the study. The production and services industries have been the most significant in terms of the crisis effect in 2014. Therefore, the overall statistical influence of innovations is found for the performance of companies.