ASSESSMENT OF THE INNOVATION FACTORS IMPACT ON ECONOMIC GROWTH IN RUSSIAN REGIONS

Purpose: The aim of the research is to test hypothesis that ensuring economic growth innovation is important for regions with higher level of development and it is less significant in explaining growth in other regions. Public and private R&D expenditure is very highly concentrated in a small number of leading regions: those closer to the productive frontier. Regions outside these high-technology cores tend to depend on less R&D-intensive forms of innovation and on technology transfer. Design/methodology/approach: We have identified the following factors that are relevant for the regional growth: human capital, infrastructure, labour market, innovation, agglomeration and connectivity, productivity. As the innovation factor, we use number of patents, internal expenditures on R&D, expenditures on technological innovations, the number of staff engaged in R&D, the volume of innovative goods, works and services, innovative activity of organizations. Innovation can have a positive impact on long-term growth. The data has been collected in 83 Russian regions for 2005-2015. We use a power-mode regression model with constant elasticity. Findings: Not all innovative factors have a positive effect on the regional economic growth. The inclusion of such factors as employment rate; internal expenditures on R & D; the number of staff engaged in R & D; the innovative goods, works and services; innovative activity of organizations; density of GDP is surplus. The analysis showed that they are not statistically significant. Partly we can explain it as the more successful regions develop due to conjuncture factors, and science and technology are not the reason for economic growth. Our hypothesis has not been confirmed. Research/practical implications: In the case when the influence of the conjuncture factors on regional economic growth is great, it is difficult to assess the significance of innovation. The division of regions into groups according to the level of per capita GRP allows us to identify significant factors of innovation for growth. From the point of view of practical application, we see that the regions below average level of per capita GDP need the development of innovation. Such institutional factors as governance, leadership, capacity should consider an active role of innovation and work force. Originality/value: On the example of the Russian regions we have shown that ensuring economic growth innovation is important for regions with below average level of development and it is less significant in explaining of growth in other regions.