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Macro-Institutional Instability and the Incentive to Innovate

  • Masino, Serena
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    This paper investigates the channels through which macroeconomic and institutional instability prevents or hinders innovative investment undertakings financed by the domestic private sector. The analysis is based on a sample of 44 countries representing all levels of development and considers a number of instability dimensions. The results suggest a negative impact of real, monetary and political instability on the aggregate level of national R&D financed by the business sector. Thus, they highlight the desirability of stable macro-institutional environments in preventing avoidance or abandonment of private innovation undertakings.

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    File URL: http://mpra.ub.uni-muenchen.de/45178/1/Masino_Macroeconomic_Instabiliy.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 45178.

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    Date of creation: 17 Mar 2013
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    Handle: RePEc:pra:mprapa:45178
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