Institutional environment, innovation capacity and firm performance in Russia

Purpose – Following the demise of the Soviet Union in 1992, Russia undertook major institutional and market‐oriented reforms to enhance the competitive advantage of domestic enterprises. Although Russia has experienced rapid growth over the last two decades, the extent to which institutions in Russia impact on firm innovation and performance remains poorly understood due to a lack of research on the subject. This paper seeks to contribute to the literature on the competitiveness of Russian firms by focussing specifically on the extent to which the state of the regulatory quality, rule of law, and corruption affect the innovation capacity and performance of firms in Russia.Design/methodology/approach – The study uses structural equation modelling and data from a large‐scale firm level survey (n=787) of firms in Russia undertaken by the World Bank in 2009. It investigates the direct and indirect perceptions of respondents of the effects the current institutional environment has on the innovation capacity an...

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