Political instability, pro-business market reforms and their impacts on national systems of innovation
AbstractWe investigate the impacts of political instability and pro-business market reforms on national systems of innovation (NSI) across a range of developing and developed countries. Evidence suggests that national systems of innovation are most likely to flourish in developed, politically stable countries and less likely to prosper in historically unstable countries. While research has shown that pro-business market reforms can be a valuable policy instrument to boost economic development in less developed countries, the extent to which these reforms affect a country's innovativeness has been neglected in the literature. In particular, the degree to which pro-business market reforms may compensate for political instability when it comes to fostering national systems of innovation remains under-researched. Our findings support established arguments concerning the strong influence of political instability on inputs to national innovation systems. We find, however, mixed effects for pro-business market reforms. While results indicate a negative direct influence on NSI, they consistently show a strong moderating effect that counterbalances the negative impact of political instability, especially in those developing country environments where science and technology are lagging. These results provide important implications for policymakers as well as for our understanding of emerging and transition economies and national technological capability.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Research Policy.
Volume (Year): 41 (2012)
Issue (Month): 3 ()
Contact details of provider:
Web page: http://www.elsevier.com/locate/respol
National innovation systems; Pro-business market reforms; Political instability; Institutional environments;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Steven Globerman & Daniel Shapiro, 2003.
"Governance infrastructure and US foreign direct investment,"
Journal of International Business Studies,
Palgrave Macmillan, vol. 34(1), pages 19-39, January.
- Steven Globerman & Daniel Shapiro, 2004. "Governance Infrastructure and U.S. Foreign Direct Investment," International Finance 0404008, EconWPA.
- Besley, Timothy J. & Burgess, Robin, 2002.
"Can Labour Regulation Hinder Economic Performance? Evidence from India,"
CEPR Discussion Papers
3260, C.E.P.R. Discussion Papers.
- Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, MIT Press, vol. 119(1), pages 91-134, February.
- Timothy Besley & Robin Burgess, 2002. "Can Labour Regulation Hinder Economic Performance? Evidence from India," STICERD - Development Economics Papers - From 2008 this series has been superseded by Economic Organisation and Public Policy Discussion Papers 33, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
- North, Douglass C, 1994.
"Economic Performance through Time,"
American Economic Review,
American Economic Association, vol. 84(3), pages 359-68, June.
- Varsakelis, Nikos C., 2006. "Education, political institutions and innovative activity: A cross-country empirical investigation," Research Policy, Elsevier, vol. 35(7), pages 1083-1090, September.
- Courvisanos, Jerry, 2009. "Political aspects of innovation," Research Policy, Elsevier, vol. 38(7), pages 1117-1124, September.
- Kazuhiro Asakawa & Ashok Som, 2008. "Internationalization of R&D in China and India: Conventional wisdom versus reality," Asia Pacific Journal of Management, Springer, vol. 25(3), pages 375-394, September.
- Carlsson, Bo, 2006. "Internationalization of innovation systems: A survey of the literature," Research Policy, Elsevier, vol. 35(1), pages 56-67, February.
- Sarah Box, 2009. "OECD Work on Innovation – A Stocktaking of Existing Work," OECD Science, Technology and Industry Working Papers 2009/2, OECD Publishing.
- Sumon Kumar Bhaumik & Shubhashis Gangopadhyay & Shagun Krishnan, 2009. "Reforms and Entry: Some Evidence from the Indian Manufacturing Sector," Review of Development Economics, Wiley Blackwell, vol. 13(4), pages 658-672, November.
- Archibugi, Daniele & Coco, Alberto, 2005. "Measuring technological capabilities at the country level: A survey and a menu for choice," Research Policy, Elsevier, vol. 34(2), pages 175-194, March.
- Shang-Jin Wei, 2000.
"How Taxing is Corruption on International Investors?,"
The Review of Economics and Statistics,
MIT Press, vol. 82(1), pages 1-11, February.
- Shang-Jin Wei, 1997. "How Taxing is Corruption on International Investors?," William Davidson Institute Working Papers Series 63, William Davidson Institute at the University of Michigan.
- Shang-Jin Wei, 1997. "How Taxing is Corruption on International Investors?," NBER Working Papers 6030, National Bureau of Economic Research, Inc.
- Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
- Choi, Suk Bong & Lee, Soo Hee & Williams, Christopher, 2011. "Ownership and firm innovation in a transition economy: Evidence from China," Research Policy, Elsevier, vol. 40(3), pages 441-452, April.
- Paul M Vaaler & Burkhard N Schrage, 2009. "Residual state ownership, policy stability and financial performance following strategic decisions by privatizing telecoms," Journal of International Business Studies, Palgrave Macmillan, vol. 40(4), pages 621-641, May.
- Stephen J Kobrin, 1979. "Political Risk: A Review and Reconsideration," Journal of International Business Studies, Palgrave Macmillan, vol. 10(1), pages 67-80, March.
- Robert Ford & Wim Suyker, 1990. "Industrial Subsidies in the OECD Economies," OECD Economics Department Working Papers 74, OECD Publishing.
- Henisz, Witold J, 2000. "The Institutional Environment for Multinational Investment," Journal of Law, Economics and Organization, Oxford University Press, vol. 16(2), pages 334-64, October.
- Douglass C. North, 2005.
"Introduction to Understanding the Process of Economic Change
[Understanding the Process of Economic Change]," Introductory Chapters, Princeton University Press.
- Leydesdorff, Loet & Meyer, Martin, 2006. "Triple Helix indicators of knowledge-based innovation systems: Introduction to the special issue," Research Policy, Elsevier, vol. 35(10), pages 1441-1449, December.
- Ratna Sahay & Rishi Goyal, 2006. "Volatility and Growth in Latin America: An Episodic Approach," IMF Working Papers 06/287, International Monetary Fund.
- Disdier, Anne-Celia & Mayer, Thierry, 2004.
"How different is Eastern Europe? Structure and determinants of location choices by French firms in Eastern and Western Europe,"
Journal of Comparative Economics,
Elsevier, vol. 32(2), pages 280-296, June.
- Anne-Celia Disdier & Thierry Mayer, 2003. "How Different is Eastern Europe? Structure and Determinants of Location Choices by French Firms in Eastern and Western Europe," Working Papers 2003-13, CEPII research center.
- Fosfuri, Andrea, 2004. "Determinants of international activity: evidence from the chemical processing industry," Research Policy, Elsevier, vol. 33(10), pages 1599-1614, December.
- Svarc, Jadranka, 2006. "Socio-political factors and the failure of innovation policy in Croatia as a country in transition," Research Policy, Elsevier, vol. 35(1), pages 144-159, February.
- James May & William Pyle & Paul Sommers, 2002. "Does Governance Explain Unofficial Activity?," Middlebury College Working Paper Series 0201, Middlebury College, Department of Economics.
- Stephen Knack & Philip Keefer, 1995. "Institutions And Economic Performance: Cross-Country Tests Using Alternative Institutional Measures," Economics and Politics, Wiley Blackwell, vol. 7(3), pages 207-227, November.
- Lundvall, Bengt-Ake & Johnson, Bjorn & Andersen, Esben Sloth & Dalum, Bent, 2002. "National systems of production, innovation and competence building," Research Policy, Elsevier, vol. 31(2), pages 213-231, February.
- Stephen J Kobrin, 1976. "The Environmental Determinants of Foreign Direct Manufacturing Investment: An Ex Post Empirical Analysis," Journal of International Business Studies, Palgrave Macmillan, vol. 7(2), pages 29-42, June.
- Gatignon, Hubert & Anderson, Erin, 1988. "The Multinational Corporation's Degree of Control over Foreign Subsidiaries: An Empirical Test of a Transaction Cost Explanation," Journal of Law, Economics and Organization, Oxford University Press, vol. 4(2), pages 305-36, Fall.
- Waguespack, David Matthew & Birnir, Johanna Kristin & Schroeder, Jeff, 2005. "Technological development and political stability: Patenting in Latin America and the Caribbean," Research Policy, Elsevier, vol. 34(10), pages 1570-1590, December.
- Susan Bartholomew, 1997. "National Systems of Biotechnology Innovation: Complex Interdependence in the Global System," Journal of International Business Studies, Palgrave Macmillan, vol. 28(2), pages 241-266, June.
- Stein, Ernesto & Daude, Christian, 2007. "Longitude matters: Time zones and the location of foreign direct investment," Journal of International Economics, Elsevier, vol. 71(1), pages 96-112, March.
- Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.