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National innovation rates: the evidence for/against domestic institutions

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  • Taylor, Mark Zachary

Abstract

Why are some countries more technologically innovative than others? The dominant explanation amongst political-economists is that domestic institutions determine national innovation rates. However, after decades of research, there is still no agreement on precisely how this happens, exactly which institutions matter, and little aggregate evidence has been produced to support any particular hypothesis. This paper will review the equivocating evidence for domestic institutions explanations of national innovation rates. Its survey will show that, although a specific domestic institution or policy might appear to explain a particular instance of innovation, they generally fail to explain national innovation rates across time and space. Instead, the empirical evidence suggests that certain kinds of international relationships (e.g. capital goods imports, foreign direct investment, educational exchanges) affect national innovation rates in the aggregate, and that these relationships are not themselves determined by domestic institutions. In other words, explaining national innovation rates may not be so much a domestic institutions story as it is an international story.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 10997.

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Date of creation: Sep 2007
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Handle: RePEc:pra:mprapa:10997

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Keywords: technology; technological; innovation; politics; institutions; research;

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  1. Witold J. Henisz, 2002. "The institutional environment for infrastructure investment," Industrial and Corporate Change, Oxford University Press, vol. 11(2), pages 355-389.
  2. Sebastian Braun, 2006. "Core Labour Standards and FDI: Friends or Foes? The Case of Child Labour," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 142(4), pages 765-791, December.
  3. Acemoglu, Daron, 2003. "Why not a political Coase theorem? Social conflict, commitment, and politics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 620-652, December.
  4. Robert E. Hall & Charles I. Jones, 1999. "Why Do Some Countries Produce So Much More Output per Worker than Others?," NBER Working Papers 6564, National Bureau of Economic Research, Inc.
  5. Witold J. Henisz & Bennet A. Zelner, 2001. "The Institutional Environment for Telecommunications Investment," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 10(1), pages 123-147, 03.
  6. W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, 03.
  7. Alice H. Amsden & Wan-wen Chu, 2003. "Beyond Late Development: Taiwan's Upgrading Policies," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262011980, December.
  8. Jensen, Nathan M., 2003. "Democratic Governance and Multinational Corporations: Political Regimes and Inflows of Foreign Direct Investment," International Organization, Cambridge University Press, vol. 57(03), pages 587-616, June.
  9. Li, Quan & Resnick, Adam, 2003. "Reversal of Fortunes: Democratic Institutions and Foreign Direct Investment Inflows to Developing Countries," International Organization, Cambridge University Press, vol. 57(01), pages 175-211, December.
  10. Hall, Peter A. & Soskice, David (ed.), 2001. "Varieties of Capitalism: The Institutional Foundations of Comparative Advantage," OUP Catalogue, Oxford University Press, number 9780199247752, September.
  11. Philipp Harms & Heinrich Ursprung, 2001. "Do Civil and Political Repression Really Boost Foreign Direct Investments?," CESifo Working Paper Series 421, CESifo Group Munich.
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