• International Journal of Technology (IJTech)
  • Vol 12, No 7 (2021)

Impact of Innovation on the Economic Efficiency of Power Engineering Enterprises: Assessment of Interdependence

Impact of Innovation on the Economic Efficiency of Power Engineering Enterprises: Assessment of Interdependence

Title: Impact of Innovation on the Economic Efficiency of Power Engineering Enterprises: Assessment of Interdependence
Elena Rytova, Polina Osyka, Natalia Victorova

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Rytova, E., Osyka, P., Victorova, N., 2021. Impact of Innovation on the Economic Efficiency of Power Engineering Enterprises: Assessment of Interdependence. International Journal of Technology. Volume 12(7), pp. 1568-1576

Elena Rytova Peter the Great St. Petersburg Polytechnic University, Polytechnicheskaya Street, 29, St. Petersburg, 195251, Russia
Polina Osyka Peter the Great St. Petersburg Polytechnic University, Polytechnicheskaya Street, 29, St. Petersburg, 195251, Russia
Natalia Victorova Peter the Great St. Petersburg Polytechnic University, Polytechnicheskaya Street, 29, St. Petersburg, 195251, Russia
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Impact of Innovation on the Economic Efficiency of Power Engineering Enterprises: Assessment of Interdependence

This paper assesses the impact of intangible assets on the economic efficiency of an enterprise, considering the power engineering industry as a subject of research. This study aims to assess the influence of individual factors typical of innovation activity in power engineering industries on an enterprise’s performance. In order to do so, both absolute and relative indicators were selected. Conducted on the basis of the Emerging Market Information Service (EMIS) financial statements, this paper provides an analysis and assessment of 159 observations for the period 2017–2019. Correlation and regression analyses were applied as the main research method. The Stata software package served as the primary research platform. Issues such as the potential of energy engineering and development prospects for the industry are currently widely discussed. In this regard, the main goal and topic of this study are relevant. The scientific validity of this paper is established based on the following elements of this study: the sample of analyzed enterprises, the comprehensive range of indicators engaged in modeling, and the obtained results and their scientific interpretation. This paper provides three models that reflect the dependence of return on capital on the indicators of intangible assets, goodwill, and book value. Furthermore, an alternative model was designed to assess the influence of the same factors on the resulting net profit indicator. A comparative analysis of the obtained models was conducted. A regression model built using the least squares method was chosen.

Digital tools; Econometric model; Intangible assets; Innovation (activity); Power engineering


        An unstable external environment raises numerous problems related to effective management in an enterprise. One of the main factors contributing to this process is the development of modern information and telecommunications technologies and other technological innovations. Drivers, such as innovative activity and the level of investment allocated to technological development, play a key role in terms of sustainable strategic development (Rudskaya and Rodionov, 2017). At present, enterprises are experiencing a complete transformation of management architecture, creating new types of response to internal and external challenges. These processes are accelerated by the digitalization of the economy and the desire of enterprises to introduce innovation via the broadening range of the latest digital tools used in the analysis of financial information and production management (Balashova and Gromova, 2017).

In the new era of industrial development, the ratio of enterprise assets to intangible assets is inevitably shifting, and the importance of R&D is growing (Berawi, 2021; Yuan et al., 2021). Moreover, it is important to ensure a fair assessment of the intellectual capital level of each individual economic entity; however, at the moment, there is no universal method for this. This increases the relevance of research on new methods of intellectual capital assessment and their comparison with existing methods (Zaytsev et al., 2020).

This is particularly relevant for the energy engineering industry, where digitalization and innovation are the key agents in maintaining competitiveness in the market. In this regard, the R&D intensity has been highlighted by many researchers, whose works are briefly reviewed in this paper. Various authors confirm the relevance of studying the specifics of power engineering and its development prospects in this regard. In particular, Langmaak et al. (2013) designed a model for estimating the cost of equipment in power engineering enterprises. Okedu et al. (2021) studied the economic efficiency of modernized equipment, and Babak et al. (2021) provided examples of models aimed at monitoring and diagnostics of electric power facilities, which directly affect the innovation activity of an enterprise and its financial efficiency. Research has mainly studied the efficiency of innovative equipment used in the production process. Such models include equipment indicators, such as electricity consumption (Wang et al., 2013), equipment failure cases (Wang and Li, 2021), and units’ technical characteristics (Babak et al., 2021), but not the innovation impact on the financial result of an enterprise as an economic entity. Assessment of the impact of innovation on the economic efficiency of power engineering enterprises has not been sufficiently covered, especially regarding the methods of mathematical modeling that are applied. This lack of research emphasizes the particular relevance of this paper, which takes the financial result as the resulting indicator, expressed through the turnover of the enterprise’s capital and net profit within the framework of this research work.


    This paper discusses the interdependence between the factors reflecting innovation within an enterprise and the indicators of its economic efficiency. Assessment was carried out by designing and building several models and the subsequent analysis of their results. Evaluation and comparison of the developed models allowed choosing a regression model considering the following factors: intangible assets, goodwill, book value, and return on capital employed. The PR model proved to be the most comprehensive and partially confirmed the first hypothesis. Another model adopted is the alternative model with FE, which includes the following factors: net profit, book value of an enterprise, fixed production assets, and accounts receivable. The alternative model with FE managed to confirm the second hypothesis. Within the framework of the study, two main hypotheses were put forward, and the second was chosen as a more comprehensive and reliable one. The assumption of the high impact of R&D and intangible assets on financial result is also proved. Although the interdependence between the factors has been established, it does not seem to be as high as expected. These results indicate that the impact of intangible assets and technical and technological development on the financial result of an enterprise is present, but still does not play a decisive role in improving economic efficiency. In this regard, this paper sets a goal for the further expansion of the study in order to assess the degree of the R&D influence on the profit in terms of the global trends, and to draw a conclusion about the role of intellectual property in the development of the Russian power engineering industry. Further research on positive global experience in the given industry is planned, such as in China and EU countries.


    The research is partially funded by the Ministry of Science and Higher Education of the Russian Federation under the strategic academic leadership program ‘Priority 2030’ (Agreement 075-15-2021-1333 dated September 30, 2021).


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