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Do weak institutions undermine global innovation production efficiency?

Author

Listed:
  • German Blanco

    (Illinois State University
    GLO)

  • Rajeev K. Goel

    (Illinois State University
    Kiel Institute for the World Economy
    ISMed/CNR)

Abstract

This paper focuses on institutional influences on innovation efficiency across countries. Whereas various causes and effects of technological change have been examined, empirical investigations of the efficiency involved in innovation production are relatively few. Using data on a large sample of nations over 2018–2020 and considering corruption, regulatory quality, and state fragility as alternative institutional dimensions, our results show that greater corruption facilitates (“greases”) efficiency in the production of innovations. This is also the case with improvements in regulatory quality, while greater state fragility increases inefficiency. These findings for the overall sample are somewhat different for the OECD and non-OECD subsamples, although the greasing effect of corruption remains throughout. A robustness check with patent protection and government size as alternative institutional dimensions is also conducted.

Suggested Citation

  • German Blanco & Rajeev K. Goel, 2023. "Do weak institutions undermine global innovation production efficiency?," The Journal of Technology Transfer, Springer, vol. 48(5), pages 1813-1838, October.
    • Handle: RePEc:kap:jtecht:v:48:y:2023:i:5:d:10.1007_s10961-023-09997-7
    DOI: 10.1007/s10961-023-09997-7
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    More about this item

    Keywords

    Patents; Innovation; Stochastic frontier analysis; Knowledge; Corruption; Institutions; Government; Uncertainty; Efficiency; Regulatory quality; State fragility;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • C20 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - General

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