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Macroeconomic Volatility, Institutional Instability and the Incentive to Innovate

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  • Serena Masino

Abstract

This study investigates the channels through which macroeconomic and institutional instability hinders innovative investment undertakings financed by the domestic private sector. The analysis is based on a sample of 44 countries and considers various instability dimensions. The results suggest a negative impact of real, monetary and political instability on the aggregate level of R&D financed by the business sector. Thus, highlighting the importance of stable macro-institutional environments in preventing avoidance or abandonment of private innovation undertakings.

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  • Serena Masino, 2015. "Macroeconomic Volatility, Institutional Instability and the Incentive to Innovate," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 116-131, February.
    • Handle: RePEc:bla:rdevec:v:19:y:2015:i:1:p:116-131
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    File URL: http://hdl.handle.net/10.1111/rode.12127
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    5. Alam, Ashraful & Uddin, Moshfique & Yazdifar, Hassan, 2019. "Institutional determinants of R&D investment: Evidence from emerging markets," Technological Forecasting and Social Change, Elsevier, vol. 138(C), pages 34-44.

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