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Can Institutions explain cross country differences in Innovative Activity?

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  • Cong Wang

Abstract

Motivated by theoretical arguments that assert a positive impact of R&D on institutions, this paper aims to provide some empirical analysis on the relationship between these two variables. In particular this paper has found a significant direct effect of institutions on R&D intensity. Countries with better institutions qualities as captured by the World Banks’ Worldwide Governance Indicators (WGI) tend to attract more scientists and engineers into the research field and to spend more on R&D as well. This paper has also found evidence that the effect of institutions varies in different economies characterized by different levels of financial development and human capital accumulation, but stays relatively unchanged across countries with different levels of trade openness.

Suggested Citation

  • Cong Wang, 2013. "Can Institutions explain cross country differences in Innovative Activity?," Monash Economics Working Papers 35-13, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2013-35
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    File URL: http://www.buseco.monash.edu.au/eco/research/papers/2013/index.html
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    JEL classification:

    • F1 - International Economics - - Trade
    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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