Academy of Strategic Management Journal (Print ISSN: 1544-1458; Online ISSN: 1939-6104)


Building a Model for Managing the Market Value of an Industrial Enterprise Based on Regulating its Innovation Activity

Author(s): Andrey Zaytsev, Dmitriy Rodionov, Nikolay Dmitriev, Rinat Faisullin

The market value of an enterprise is one of the main performance indicators of any modern enterprise. Consequently, to ensure a continuous increase in the value of the enterprise, it is necessary to implement measures for its management. This study suggests that it is possible to predict and change the market value of an industrial enterprise based on regulating its innovation activity. For confirming the suggested thesis, it is proposed to construct a model of dependence of market value on the innovation activity of an enterprise by means of regression analysis tools. In such a context, it is necessary to consider innovative activity as a value which can be changed and controlled by the enterprise. The solution to the task set has conditioned development of the author's method of calculating the integral indicator of innovative development of an economic agent, taking into consideration its functioning in the industrial sphere. The introduced integral indicator consists of coefficients that characterize the innovative potential of an enterprise, each of which can be adjusted to the current corporate strategy. In order to prevent distortion of data, the proposed method also includes the potential for assessing the impact of the innovation activity on economic value added, as a significant indicator referring to market value formation. Innovation activity of an industrial enterprise characterizes its competitive position in the market in a strategic range, which has a direct impact on the market value of the entity. In case of an insufficient level of the innovative development, the increase of market value is unlikely to be possible. The importance of the proposed model lies in creation of the author's method to consider innovation activity dynamics for modeling processes by market value management. Testing the given model proves expediency of its use from the position of the economic analysis. So, in the course of the model consideration at an industrial enterprise, positive connection between the author's integral indicator and the market value of the enterprise has been identified. In the future, it is planned to adapt the developed model to a specific innovation sector of the economy, taking into account macroeconomic aspects, such as the transition state of the Russian economy.

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