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Revisiting varieties of capitalism: an empirical analysis of the institutional determinants of innovation in Germany

Author

Listed:
  • Daniel Herrero

    (Complutense Institute of International Studies (ICEI)
    Complutense University of Madrid)

  • Julián López-Gallego

    (Complutense Institute of International Studies (ICEI))

Abstract

This paper applies the varieties of capitalism (VoC) theory of innovation to a country-case study: Germany. Drawing on a firm-level data set, the article measures the joint impact of a set of coordinated institutions—regarding the four institutional arenas highlighted by VoC—on incremental, radical, process innovation and imitations. Furthermore, to properly assess the effect of institutions, the probability to innovate is calculated across industries, export status and firm sizes. Evidence from logit modelling points to the crucial role of the selected group of institutions for all types of innovation, suggesting that the main road to innovation in Germany is a non-market corporate strategy, and that the VoC approach might be renewed.

Suggested Citation

  • Daniel Herrero & Julián López-Gallego, 2022. "Revisiting varieties of capitalism: an empirical analysis of the institutional determinants of innovation in Germany," SN Business & Economics, Springer, vol. 2(8), pages 1-31, August.
    • Handle: RePEc:spr:snbeco:v:2:y:2022:i:8:d:10.1007_s43546-022-00257-8
    DOI: 10.1007/s43546-022-00257-8
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    More about this item

    Keywords

    Varieties of capitalism; Innovation; Corporate strategy; Economic institutions;
    All these keywords.

    JEL classification:

    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O35 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Social Innovation
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State
    • I2 - Health, Education, and Welfare - - Education

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