Academic journal article Journal of Economic and Social Development

What Firms Are Rewarded after Global Financial Crisis? the Role of Innovation and Globalization Strategies in Recovery

Academic journal article Journal of Economic and Social Development

What Firms Are Rewarded after Global Financial Crisis? the Role of Innovation and Globalization Strategies in Recovery

Article excerpt

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While studies of determinants of firms' growth always have been in the focus of both theoretical and empirical research, the Economic Crisis of 2008-2009 being a major shock to most of the countries has motivated studies aimed at revealing factors of sustainability of firms' performance. For Russian economy assessment of sustainability is specifically interesting as for quite a long time Russia enjoyed almost a decade (1999-2008) of high and stable rates of growth. Favorable macroeconomic conditions on one hand provided opportunities for growth and modernization for Russian firms. In particular, during the period of growth a lot of Russian firms became more open to the World, increased participation in the foreign trade, acquired foreign co-owners, build up their international partnerships, etc. Though, on the other hand, high rates of economic growth, relatively easy access to external financing, etc. softened up budget constraints and slowed down the processes of "constructive destruction", i.e. crowding out of less efficient firms by more efficient. Thus, the relatively high level of heterogeneity in terms of productivity and other performance indicators, in particular in Russian manufacturing persisted (Gonzalez et al, 2013).

Russian manufacturing has been strongly hit by the crisis of 2008-2009 and manufacturing has been hit harder than other industries. During the acute phase of the crisis (in Russia it continued since the last quarter of 2008 till the second quarter of 2009) the drop of production in manufacturing was about 16%, comparing, for example, to about 5% in agriculture and trade. The recovery measured at macroeconomic level was comparatively quick and the industrial production reached the pre-crisis level. Still, after 2010 the growth rates in manufacturing began to decline and by the end of 2013 fell to near zero level.

This paper mostly focuses on the consequences of the crisis for more globalized firms, which has been prior to the crisis more active in different international activities. We are interested in verifying the hypothesis that active globalization at a firm level facilitates the performance during the crisis and post-crisis recovery period using the integrated database of the survey data and objective statistics.


We use several data sources for our research. The main source of empirical data comes from results of large-scale empirical survey about of 1000 medium and large enterprises in 8 twodigit manufacturing industries (by NACE code) conducted by face-to face interviews with topmanagers in more than 40 Russian regions in 2009 (for detailed description of the database see Kuznetsov et al. 2011). The questionnaire covers a variety of issues on competitiveness and behavior patterns of firms, including their internationalization and innovation activities in pre-crisis period of 2006-2008, i.e. - export propensity and geographical structure of exports, importing of intermediaries and equipment, availability of foreign strategic partners, financing of new product development in 2008. The initial survey data were linked to RUSLANA/Amadeus data on firms' sales. As only the firms with reported data for all years in 2007-2012 time period were included into the analysis the initial sample reduced to 670 observations.

As a measure of firms' growth we use an indicator of sales in 2007-2012 deflated by price indexes for the selected 2-digit industries in order to capture price-shocks due to global crisis. In our previous research using the procedure of hierarchical cluster analysis applied to the general population of Russian medium and large manufacturing firms as well as to our sample we revealed four stable clusters describing different trajectories of firms' growth in 2007-2012 (Ermilova et al, 2015).The sales for each firm are standardized using Z-scores (Z-values) in relation to the average sales amount for the specific companies for the total period of 20072012. …

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