The Relationship between R&D Expenditures and Performance of Russian Companies: the Mediation Role of Patents

Abstract. This paper presents the results of a study devoted to the analysis of the patent activity of Russian companies. Patenting in this case is considered as a mediator factor in the relationship between R&D expenditures and firm performance. The theoretical part considers the analysis of theoretical and empirical articles examining the relationship between R&D expenditure, number of patents and the total activities of firms. The study of the relevant works served as a basis for hypotheses which are investigated in the empirical part of the current research. An empirical study was conducted using the data of 1096 Russian companies for the period from 2004 to 2014 applying the method of partial least squares (PLS) via software package SmartPLS 3.0. The database is provided by the International laboratory of intangible-driven economy. According to the analysis, the conclusions about the presence of partial mediation were made: patent activity is a mediation factor, that partly explains the positive effect of R&D investment on company performance. However, the effect of the indirect impact was quite small. Thus, the number of patents can be considered as the driver of successful operation in Russian companies in the market environment.