Democratic Institutions and Innovative Development of Firms: Subnational Evidence from Russia

The topic of this Graduation Qualification Work is “Democratic Institutions and Innovative Development of Firms: Subnational Evidence from Russia”. To date, there are no studies that would be devoted to the study of the relationship between democratic institutions and the innovative development of firms. This problem determines the purpose of this study. The main hypothesis is that such a relationship exists and is positive. The work will be presented in the form of the following structure. The first chapter contains a review of the literature, which highlights key issues that are relevant to the research question. Further, in the second chapter, a detailed description of the data, an empirical analysis and a methodology for constructing an econometric model are given. Chapter 3 includes the interpretation of the results obtained, on the basis of which the conclusions in the section “Conclusion” are formulated. The study is based on an analysis of the innovation activities of Russian enterprises in 37 regions of the Russian Federation, which was conducted by the European Bank for Reconstruction and Development in cooperation with the World Bank. And also on the expert rating of the regions' democracy, calculated by the Carnegie Moscow Center and N. V. Petrov and A. Titkov, employees of the HSE. In the process of writing the work, an empirical analysis was carried out with the help of which factors that influenced the innovative development of companies were identified. It is worth noting that, based on the topic of work, it is rather difficult to initially predict the result. In this regard, the hypothesis, which suggested a positive relationship between the innovative development of firms and democratic institutions, was formulated at an intuitive level and proved during the study.