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Multi-National Firms, Corruption and Innovation in Russia

Multinational Enterprises, Markets and Institutional Diversity

ISBN: 978-1-78441-422-1, eISBN: 978-1-78441-421-4

Publication date: 25 October 2014



The purpose of this chapter is to examine the relationship between multi-national firms (MNEs), institutions and innovation.


We empirically examine the link between corruption and innovation within the environment of Russia. The use of data on foreign direct investment (FDI) from both emerging and developed markets provides us an opportunity to test whether the impact on innovation of different types of MNEs varies.


We find that, in the environments with high political risk, corruption may act as a hedge against such risks, boosting the scope and scale of innovation. We, however, find no support for the assumption that the experience at home of emerging country MNEs would offer them the advantage over the developed country MNEs in environments with weak institutions.

Research implications

One of the major implications of this study is that, in as geographically large country as Russia, it is critical to consider the factors affecting innovation output at sub-national level.


The study is novel as it is the first to examine how innovation is affected by institutions in general and corruption in particular. But in our approach, we use the measure of the actual rather than perceived corruption. Previous studies have largely focused on developed country MNEs; in this study, we examine the impact on innovation of investors from developed as well as emerging economies.



Smith, N., Thomas, E. and Antoniou, C. (2014), "Multi-National Firms, Corruption and Innovation in Russia", Multinational Enterprises, Markets and Institutional Diversity (Progress in International Business Research, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 347-371.



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