Socio-Institutional Environment and Innovation in Russia

Abstract

This article investigates the impact of social capital and institutions on innovation outcome in Russian regions in 1997–2011. The novelty of the article also lies in the use of two metrics of innovation: the number of new technologies developed and patents filed. The findings provide strong support for the argument that social capital (proxied by social tension) and institutions (proxied by institutional potential) influence innovation activity. Furthermore, different types of innovation outcome are affected differently: the effect of social tension on technology development is significantly negative but insignificant with patenting, while institutional potential affects patenting negatively but its effect on technology development is insignificant.

KEYWORDS:

• institutions
• patents
• Russia
• social capital
• technologies

Notes

Especially in 1992–98, during the period of some major structural changes in the economy and of financial crisis that caused GDP to fall (nearly) two-fold.

Defined as the agglomeration of firms and other institutions devoted to the creation of new and improved technology (Nelson and Nelson 2003).

Developed in the 1980s by evolutionary theorists (see Iammarino 2005).

Defined as the capacity of a region to shape institutional framework (required for the generation of innovation) in order to support the emergence of the “socio-institutional environment” or “innovation-supportive culture” (Doloreux and Parto 2005, 135).

To the best of the authors’ knowledge, this is the closest match to an indicator of social capital that is available in the context of Russia.

For example, Japan, Finland, Sweden, Korea, Taiwan, and Israel clearly show that education has been a particularly important driver in the development of their innovation capacity.

This said, a local affiliate firm may only benefit from technology transfer if its foreign parent wants to exploit its firm-specific assets in a host country (Markusen 1995).

Count data models have been previously applied to the patent-R&D relationship in many econometric previous (e.g., Hall 2000; Hall, Jaffe, and Trajtenberg 2005; Mohnen, Mairesse, and Dagenais 2006; Raymond et al. 2009).

For example, Fritsch (2002) compared the quality of regional innovation systems based on the negative binominal estimations.

Due to data limitations, it was not possible to use any alternative measures for neither social capital nor for institutions.