Assessing the Financial Mechanisms for Innovation Support in the Republic of Uzbekistan: A Comparative Analysis of Enablers and Constraints to Innovation Across Two Industries
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5.2 ECONOMICS AND BUSINESS, Business and Management.
Innovation is fundamental not only to individual firms but ultimately to a country's economic growth and stability. Innovation Systems assert that innovation depends not only on how individual firms and external actors operate, but also on the dynamics of their interaction as part of the system. While funding for innovation is a central theme of Innovation Systems models, there is a gap in the literature on this topic, particularly in regard to the role played by government in transition economies (Bruton, Su, & Filatotchev, 2018). The majority of the research has focused on micro/meso-level support, but there is a significant gap at the macro level. This thesis bridges this gap by theoretically conceptualising and empirically testing the effect of macro-level financial support mechanisms on both innovation and performance constructs within a Sectoral Innovation System (SIS), spanning firms’ internal capability and their external context. Using interview and survey data from Uzbekistan’s machine building and chemical industries, this thesis contends that a firm’s internal capability consisting of absorptive capacity, international growth orientation, investment in-house R&D, and barriers in the market where a firm operates, affects this relationship. Specialists from academia, governmental organisations and managers from both industries participated in interviews. A survey of both sectors yielded 351 complete responses. This data was analysed through structural equation modelling using Mplus. The research findings validate the theoretical model put forward and indicate that the existence of macro-level financial support mechanisms impact innovation and performance constructs through mediated factors. Furthermore, control variables such as age, size, and government ownership have a significantly positive correlation with access to finance, absorptive capacity, international growth orientation, and firm performance. Although industry controls show a significantly negative link to incremental innovation and financial performance, there is a significantly positive link to radical innovation performance. This justifies the existence of a differentiated SIS approach for innovation support in Uzbekistan. Interestingly this research found that international growth orientation is a more significant factor than absorptive capacity and in-house R&D respectively, in the relationship between access to finance and innovation performance. A key contribution of this research is that it advances the understanding of factors that contribute to firm level innovation success. It also exposes best practice for firms and government policymakers in order to maximise performance outcomes. The core argument of this thesis is that access to finance and the individual components of firms’ internal capabilities need to be synchronized to maximize value creation and innovative performance. In this process, the role of government is crucial in designing effective financial and legal infrastructures. Absorptive capacity, international growth orientation, and investment in-house R&D are key micro-level components. This multipronged approach, although challenging to implement, would help to drive more favourable outcomes. Managers are offered a framework to analyse the market and internal capabilities which may moderate the supply of finance and work towards aligning them to achieve superior performance outcomes.
Khaydarov, R. (2020) Assessing the Financial Mechanisms for Innovation Support in the Republic of Uzbekistan: A Comparative Analysis of Enablers and Constraints to Innovation Across Two Industries, Doctoral Thesis, Technological University Dublin. DOI:10.21427/DYNY-2374
Submitted in fulfilment of the requirements for the degree ofDoctor of Philosophy in the College of Business, Technological University Dublin