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The Innovation Arena: A Method for Comparing Innovative Problem-Solving Across Groups

The Innovation Arena: A Method for Comparing Innovative Problem-Solving Across Groups

Published on: May 13, 2022

Do weak institutions undermine global innovation production efficiency?

German Blanco^1,2, Rajeev K Goel^3,4,5

¹Illinois State University, Normal, IL USA.

The Journal of Technology Transfer

|June 26, 2023

Summary

Corruption and regulatory quality can enhance innovation efficiency, while state fragility hinders it. These institutional factors significantly impact how effectively nations produce innovations, with corruption acting as a "greasing" mechanism.

Keywords:

Corruption Efficiency Government Innovation Institutions Knowledge Patents Regulatory quality State fragility Stochastic frontier analysis Uncertainty

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Area of Science:

Economics
Innovation Studies
Political Science

Background:

Empirical research on innovation efficiency is limited.
Technological change has been widely studied, but the efficiency of its production is less explored.

Purpose of the Study:

To investigate the impact of institutional factors on innovation efficiency across countries.
To examine the role of corruption, regulatory quality, and state fragility in innovation production.

Main Methods:

Analysis of data from a large sample of nations between 2018-2020.
Utilizing corruption, regulatory quality, and state fragility as key institutional dimensions.
Conducting robustness checks with patent protection and government size.

Main Results:

Increased corruption was found to facilitate innovation production efficiency.
Improvements in regulatory quality also positively correlated with innovation efficiency.
State fragility was associated with decreased innovation efficiency.
Findings showed variations between OECD and non-OECD countries, though corruption's positive effect persisted.

Conclusions:

Institutional dimensions like corruption and regulatory quality play a significant role in shaping innovation efficiency.
State fragility negatively impacts a nation's ability to efficiently produce innovations.
Policy interventions should consider these institutional factors to foster innovation.