Public Support for Innovation in Russian Firms: Looking for Improvements in Corporate Performance Quality

  • Yuri Simachev
  • Mikhail KuzykEmail author
  • Vera Feygina


This research focuses on the efficiency of Russia’s policy to foster innovation. We conduct an empirical analysis of how policy instruments impact firms’ behavior. The analytical data are obtained from a survey of more than 650 Russian industrial firms in 2012. The analysis shows that state support for innovation clearly targets successful companies and does not target laggard or insider (i.e., partially state-owned) firms. Comparing innovation effects on firms with and without state support, we found no strong improvement in corporate performance as a result of state-supported innovation. A significant positive correlation with state support existed for only one characteristic of firm performance: export volume. Considering specific effects of tax incentives and public subsidies on companies’ innovation behavior, we found out that direct public funding was more likely to mitigate risk and facilitate the launch of new innovative projects. Simultaneously, both tools lead to public funds crowding out private funds.


Innovation Firm behavior Tax incentives Public subsidies and grants Government innovation policy 

JEL Classification

D21 L25 O10 O31 O57 


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Copyright information

© International Atlantic Economic Society 2015

Authors and Affiliations

  1. 1.Interdepartmental Analytical CenterMoscowRussia

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