Forecasting of Innovative Activity Dynamics Using Industry Competition Indicators Analysis (Evidence from Food Industry of Russia)

Abstract

Abstract With the current fast pace of time it is crucially important to make reliable and trustworthy forecasts of market trends in order to keep abreast of competition and maintain a long-term competitiveness. This article explores possibility to make forecasts about innovation activity dynamics in industries based on data concerning changes in competitive structure and intensity. It contains an overview of empirical evidences concerning relationship between dynamics of competition and innovation activity from the food industry of Russian Federation. In order to provide a complete research of interrelations between abovementioned factors we put forward and empirically test a new approach considering market barriers analysis and estimation of market entry threats. For identifying cause-and-effects relationships between the various factors in this study we use the mathematical statistics methodology. The concentration overview was performed on the basis of financial statement database. Large industry merger and acquisition dataset over the period 2006-2012 was used to describe industry competition. The research for food industry through the Russian regions explored relations between factors of industrial competition, such as the size of market barriers and probability of new competitors’ entry, and factors of innovative activity, including expenditures on technologies and volumes of innovative goods’ production. Given results make possible using suggested approach to a competition dynamics analysis for purposes of forecasting of innovative activity in industry.