How import integration changes firms' decisions to innovate

This paper examines how Russian manufacturing firms pursue technology innovation in response to imports. The research is based on the data from two surveys of manufacturing companies performed in 2005 and 2009. The findings show beneficial effects of importing on innovation. Previous involvement in the importation of equipment and intermediates leads to future innovation, and there is evidence of simultaneous choice in favour of imports and innovation in case of manufacturing equipment. The learning effects from importing seem to be higher for product than for process innovation. The decisions of firms to invest in innovation and to import are sensitive to their location, technology position, pressure from import competition, and their efforts to conduct R&D in addition to importing embodied knowledge.