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When and Why Do Innovation Policies Change? A Performance Feedback Perspective

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  • Lingjuan Zhao
  • Kent Ngan-Cheung Hui
  • Feng Xiong
  • Yuxin Xia

Abstract

National innovation is important for driving a country’s long-term economic growth and identifying social problem solutions. However, while some countries maintain favorable policies for promoting innovation, some seem to fall behind. In addition, a country’s innovation policies may change over time. In this study, we examine when and why policy-makers change innovation policies. Specifically, we draw on performance feedback theory to theorize how aspirations for national innovation may affect a country’s innovation policies. Based on the data of member states of the Organization for Economic Co-operation and Development (OECD), we find that when national innovation output is below the level of aspiration, policy-makers improve policies to attract private R&D investment (expand public R&D investment) if national private R&D investment (national public R&D investment) is also below the aspiration levels. However, the shortfalls in national private or public R&D investment alone do not motivate policy-makers to take any action. Such findings provide strong implications for policy-makers and innovators in both the private and public sectors.

Suggested Citation

  • Lingjuan Zhao & Kent Ngan-Cheung Hui & Feng Xiong & Yuxin Xia, 2023. "When and Why Do Innovation Policies Change? A Performance Feedback Perspective," SAGE Open, , vol. 13(1), pages 21582440231, March.
    • Handle: RePEc:sae:sagope:v:13:y:2023:i:1:p:21582440231162502
    DOI: 10.1177/21582440231162502
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