Individualism, Formal Institutions, and National Innovation: A Configurational Analysis of 80 Countries

Innovation constitutes a key driver of long-term economic and societal prosperity, motivating extensive research on its underlying determinants. Although culture is acknowledged as being of utmost importance, it has predominantly been examined in isolation from institutional contexts. This study explores how individualist and collectivist cultures contribute to cross-national differences in innovation performance, and how these cultural effects interact with formal institutions. Fuzzy-set qualitative comparative analysis is used on data from 80 countries to identify multiple configurations of cultural and institutional conditions associated with high and low innovation output. Our empirical findings show that individualism and robust formal institutions independently function as necessary and sufficient conditions for high innovation performance; nevertheless, their simultaneous presence is essential for maximizing innovation output. In contrast, the absence of individualism alone emerges as sufficient to severely constrain innovation. We use these asymmetric results to propose a novel typology of national innovation regimes.