Competitiveness of Russian Companies in the condition of import substitution: the role of intellectual resources
Recent years we have seen the expanding gap in competitiveness of Russian companies comparing to their international rivals. The underdevelopment of Russian domestic production led to the significant share of import in Russian economy. The import share in different sectors ranges from 25 to 70% and has been growing every year starting from early 2000s (World Economic Forum, 2014). Notably, that about 43% of the average consumer basket in 2014 in Russia contains import products (World Economic Forum, 2014). The recent economic and political challenges that were faced by the Russian economy have demonstrated the substantial harm of the existent structure of our trade balance. High level of import of the high-technological product along with the predominance of the raw materials in export led to the considerable dependency of the Russian economy on the value of the ruble and world prices of minerals. The problem of an insufficient competitiveness of Russian companies was considerably exacerbated while knowledge-based economy arose. Our sectors are behind both in a quality and costs of the product. That is brought by a low productivity, obsolete technologies employed and significant outflow of human resources.
The research goal of the project is to reveal the traits of strategic behavior regarding intangibles with perspective to global competitiveness. We also search for the incentives of companies to switch to the intangible-intensive strategy. Main empirical issue in this project concerns the gap in the endowment of intangible resources of Russian companies with respect to their European rivals. The research group assumes that this lack in endowment of intangibles is the origin of the low competitiveness and investment attractiveness of Russian companies.
The scope of research goal can be characterized by the following tasks that the project team is going to fulfill:
· to elaborate the theoretical framework for analysis of companies strategic behavior with regard to their intangible resources;
· to collect the unique database of financial and non-financial indicators for Russian companies;
· to analyze strategic behavior regarding intangibles for Russian companies considering European companies as benchmark;
· to discover external incentives to switch on intangible-intensive strategy and implicate them for policy making recommendations;
· to develop an analytical tool “Monitor of Intangibles in Russian Companies” (MIRC).
The key contribution of this study is the approach to conceptual modeling of company strategic behavior regarding intangibles. This approach enables new focus on company decisions to intensify intangible resources or considerably change their strategy. The modeling is based on dynamic optimization under uncertainty that is specifically high when considering intangible-intensive strategy. The approach provides fundamental contribution and opens new line in the theory of strategic management and corporate finance.
The second important point of theoretical contribution is related to the conceptual framework “intangibles-competitiveness-investment attractiveness”. This structural model called “triangle model” in our study describes value creation through intangibles based on EVA (economic value added) and MVA (market value added) concepts. This theoretical reasoning enables demonstration of the agent problem in companies that intensify intangibles and identification of company value drivers.
Moreover our research allows empirical comparative analysis of company positions in strategy for intangibles. The methodological contribution of this study is associated with the validated tool for collecting and proceeding data about company intangibles based on publicly available information. This methodology allows estimation of more than 50 primary indicators of intangibles as well as statistically validated constructs of 6 core elements of companies’ intangibles: management capabilities, human resource capabilities, business process capabilities, innovative capabilities, customer loyalty and networking capabilities.
Theoretical and methodological design of the study has already provided empirical contribution and gives opportunity to significantly extend empirical investigation of Russian companies in the context of global competitiveness.
This research finally aims at considerable practical contribution. This project seeks to sustainable development of new monitoring of Russian companies out of the organizational and time frames of the current project. For that purpose we create the information system based on automatic data updating for Russian and European companies. The information system “Monitor of Intangibles in Russian Companies” (MIRC) is expected to be equipped with analytical tool to classify, rank and dynamically monitor companies. This information is of a particular interest for policy-makers.
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