Another look at cultural and institutional determinants of R&D investment: a worldwide study
Keywords:
culture, innovation, institutional framework, R&D InvestmentAbstract
We analyze a sample of 65 countries to examine the national structural and cultural determinants of R&D investment. Our findings suggest the existence of a legal effect, wherein other structural determinants are effective only in countries with a strong rule of law. Additionally, we find that cultural openness and long-term orientation are positively associated with R&D investment. While innovation efficiency attracts foreign R&D investment, innovation efficacy acts as a deterrent, as profitable innovation opportunities are typically seized by domestic investors. Furthermore, we identify a substitution effect, in which the government compensates for insufficient investment from both domestic and foreign investors.
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