Regional conditions and innovation in Russia: the impact of foreign direct investment and absorptive capacity

Regional conditions and innovation in Russia: the impact of foreign direct investment and absorptive capacity. Regional Studies. Using the count of patent applications filed and new technologies developed (as two alternative innovation output metrics), this paper examines the impact of foreign direct investment (FDI) and absorptive capacity on regional innovation across Russia in 1997–2011. After controlling for the effects of human capital, research and development (R&D) expenditures, R&D personnel, economic development and urbanization, the study confirms a significantly positive effect of FDI on innovation. Findings show that although the regions with a higher level of human capital benefited more from FDI-related spillovers, human capital per se affected innovation adversely when absorptive capacity was added to the model.