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The impact of governance and infrastructure on innovation

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  • Rudolf Sivak
  • Anetta Caplanova
  • John Hudson

Abstract

This article uses a recent wave of the World Bank Enterprise Survey to analyse four aspects of innovation: (i) the introduction of a new product or service, (ii) product/service upgrading, (iii) R&D and (iv) the licensing of technology. Good governance affects innovation on several dimensions. Bureaucracy, in the form of permits posing a problem for firms, can deter firms from innovating themselves, moving them towards the licensing of foreign technology, and corruption deters R&D. However, there is evidence of a negative impact of good and effective courts on innovation and R&D. Although perhaps slightly surprising, this is not inconsistent with much of the literature. In addition regional infrastructure, which is to varying degrees also determined by government policy, is significant in determining innovation. This includes transport, IT and financial infrastructure.

Suggested Citation

  • Rudolf Sivak & Anetta Caplanova & John Hudson, 2011. "The impact of governance and infrastructure on innovation," Post-Communist Economies, Taylor & Francis Journals, vol. 23(2), pages 203-217.
    • Handle: RePEc:taf:pocoec:v:23:y:2011:i:2:p:203-217
    DOI: 10.1080/14631377.2011.570050
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    References listed on IDEAS

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    1. Philippe Aghion & Reinhilde Veugelers & Clément Serre, 2009. "Cold Start for the Green Innovation Machine," Policy Contributions 354, Bruegel.
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    1. Nam, Hyun-Jung & Bang, Jeongseok & Ryu, Doojin, 2023. "Paradox of trade openness: The moderated mediating role of governance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).
    2. Andrés Rodríguez-Pose & Marco Di Cataldo, 2015. "Quality of government and innovative performance in the regions of Europe," Journal of Economic Geography, Oxford University Press, vol. 15(4), pages 673-706.
    3. Peiró-Palomino, Jesús & Perugini, Francesco, 2022. "Regional innovation disparities in Italy: The role of governance," Economic Systems, Elsevier, vol. 46(4).
    4. Dejene Mamo Bekana, 2021. "Innovation and Economic Growth in Sub-Saharan Africa: Why Institutions Matter? An Empirical Study Aross 37 Countries," Arthaniti: Journal of Economic Theory and Practice, , vol. 20(2), pages 161-200, December.
    5. Isabel Gallego-Álvarez & María Consuelo Pucheta-Martínez, 2021. "Hofstede’s cultural dimensions and R&D intensity as an innovation strategy: a view from different institutional contexts," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 11(2), pages 191-220, June.
    6. Anetta Čaplánová & Rudolf Sivák & John Hudson, 2012. "Vplyv priamych zahraničných investícií na inovačnú činnosť firiem [The Impact of Foreign Direct Investment on Firms´ Innovation Activities]," Politická ekonomie, Prague University of Economics and Business, vol. 2012(6), pages 764-779.
    7. Eslam A. Hassanein & Nagwa Samak & Salwa Abdelaziz, 2024. "The synergetic effect of economic complexity and governance on quality of life: policy thresholds," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-20, December.
    8. Xiaohua Yang & Cheng Liu & Jingling Lan, 2023. "Sustainable Technology Diffusion Manufacturing Outwards FDI Firms: Evidence from China Using Numerical Simulation Methods," Sustainability, MDPI, vol. 15(4), pages 1-23, February.
    9. Nam, Hyun-Jung & Bang, Jeongseok & Ryu, Doojin, 2023. "Do financial and governmental institutions play a mediating role in the spillover effects of FDI?," Journal of Multinational Financial Management, Elsevier, vol. 69(C).
    10. Zhu, Baoying & Yang, Mingyan & Chu, Xu, 2024. "Good governance and innovation: Economic freedom matters," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    11. Ruqia Shaikh & Zhiqiang Li & Xiaoli Wang & Muhammad Rizwan Nazir, 2022. "Firm innovation and ultimate control mechanism: Case of emerging market," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(2), pages 440-456, March.
    12. Roberta Arbolino & Raffaele Boffardi & Luisa De Simone, 2019. "Which are the Factors Influencing Innovation Performances? Evidence from Italian Cohesion Policy," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 146(1), pages 221-247, November.

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