Does governance efficiency matter for national innovative capacity? One tale from different countries

ABSTRACT Various factors possibly impact on national innovative capacity. Governments are makers and implementers of national innovative policies, then, does its governance efficiency matter for the innovation of a country? Empirical evidence about the relationship between governance efficiency and national innovative capacity is still inadequate. To fill this research gap, the authors, based on the application of machine learning technique, have selected valid variables, conduct analysis with different models using the panel data of 117 countries from 1995 to 2015. The results of different models show that governance efficiency has a significant and positive impact with stability and reliability on innovation. In addition, the authors divide the 117 countries into different regions in accordance with economic development and geographic proximity, found that governance efficiencies of different regions have a heterogeneous but positive impact on national innovative capacity. Finally, potential policy implications are discussed.

[1]  Antonio Messeni Petruzzelli,et al.  The impact of technological relatedness, prior ties, and geographical distance on university-industry collaborations: A joint-patent analysis , 2011 .

[2]  Kris Aerts,et al.  Two for the Price of One? On Additionality Effects of R&D Subsidies: A Comparison between Flanders and Germany , 2006 .

[3]  Joseph Wong.  Betting on Biotech: Innovation and the Limits of Asia's Developmental State , 2011 .

[4]  Björn A. Sandén,et al.  ‘Legitimation’ and ‘development of positive externalities’: two key processes in the formation phase of technological innovation systems , 2008, Technol. Anal. Strateg. Manag..

[5]  Pablo del Río,et al.  The market failure and the systemic failure rationales in technological innovation systems , 2013 .

[6]  V. Acharya,et al.  Bankruptcy Codes and Innovation , 2007 .

[7]  James D. Fearon,et al.  Ethnic and Cultural Diversity by Country* , 2003 .

[8]  Paola Zuccolotto,et al.  Variable Selection Using Random Forests , 2006 .

[9]  R. Barro,et al.  A New Data Set of Educational Attainment in the World, 1950-2010 , 2010 .

[10]  Kamal Saggi,et al.  The Case for Industrial Policy: A Critical Survey , 2006 .

[11]  Adrian Leftwich,et al.  Bringing politics back in: Towards a model of the developmental state , 1995 .

[12]  Overcoming the Innovation Challenge: Examining the Determinants of New Product Innovation in Chinese SMEs , 2015 .

[13]  Daniel A. Kaufmann,et al.  The Worldwide Governance Indicators: Methodology and Analytical Issues , 2010 .

[14]  Ching‐chong Lai,et al.  Abatement R&D, market imperfections, and environmental policy in an endogenous growth model , 2014 .

[15]  Jeffrey L. Furman,et al.  The Determinants of National Innovative Capacity , 2000 .

[16]  S Chung,et al.  Building a national innovation system through regional innovation systems , 2002 .

[17]  R. Parente,et al.  Determinants of cross-national knowledge transfer and its effect on firm innovation , 2007 .

[18]  C. Freeman.  The ‘National System of Innovation’ in historical perspective , 1995 .

[19]  C. Edquist.  Systems of Innovation: Technologies, Institutions and Organizations , 1997 .

[20]  Stephen Roper,et al.  The Determinants of Innovation: R & D, Technology Transfer and Networking Effects , 1999 .

[21]  D. Mowery.  The U.S. national innovation system: Origins and prospects for change , 1992 .

[22]  Kris Aerts,et al.  Two for the price of one? Additionality effects of R&D subsidies: A comparison between Flanders and Germany , 2008 .

[23]  Adele Cutler,et al.  PERT – Perfect Random Tree Ensembles , 2001 .

[24]  W. Goldfrank,et al.  MITI and the Japanese Miracle: The Growth of Industrial Policy, 1925-1975. , 1982 .

[25]  Richard T. Gretz,et al.  R&D subsidy games: a cost sharing approach vs. reward for performance , 2012 .

[26]  G. Tassey.  Tax incentives for innovation: time to restructure the R&E tax credit , 2007 .

[27]  A. Pires.  Competitiveness-shifting effects and the prisoner?s dilemma in international R&D subsidy wars , 2015 .

[28]  Yi Xu,et al.  Government grants, private R&D funding and innovation efficiency in transition economy , 2015, Technol. Anal. Strateg. Manag..

[29]  N. Anderson,et al.  Managing innovation and change : a critical guide for organizations , 2002 .

[30]  H. Kondo.  International R&D subsidy competition, industrial agglomeration and growth , 2013 .

[31]  D. Pannell.  Technology change as a policy response to promote changes in land management for environmental benefits , 2009 .

[32]  Rachel Griffith,et al.  How Special is the Special Relationship? Using the Impact of Us R&D Spillovers on UK Firms as a Test of Technology Sourcing , 2004 .

[33]  John T. Scott,et al.  Public-sector entrepreneurship , 2018 .

[34]  F. Perez-Sebastian.  Market failure, government inefficiency, and optimal R&D policy , 2015 .

[35]  D. Helbing,et al.  Growth, innovation, scaling, and the pace of life in cities , 2007, Proceedings of the National Academy of Sciences.

[36]  Yanyan Gao,et al.  Does Democracy Cause Innovation?An Empirical Test of the Popper Hypothesis , 2017 .

[37]  Andrzej Bolesta.  The developmental state , 2014 .

[38]  Ulrich Witt,et al.  Innovations, externalities and the problem of economic progress , 1996 .

[39]  Po-Hsuan Hsu,et al.  Financial Development and Innovation: Cross-Country Evidence , 2013 .

[40]  Ben R. Martin,et al.  Technology foresight for wiring up the national innovation system: experiences in Britain, Australia and New Zealand , 1999 .

[41]  E. Garnsey,et al.  Funding for innovation in small firms: The role of government , 1993 .

[42]  In Choi,et al.  Unit root tests for panel data , 2001 .

[43]  Kevin Morgan,et al.  The Regional Innovation Paradox: Innovation Policy and Industrial Policy , 2002 .

[44]  Rui Baptista,et al.  Geographical Clusters and Innovation Diffusion , 2001 .

[45]  C. Freeman.  The Determinants of Innovation. , 1979 .

[46]  D. Skuras,et al.  The effects of regional capital subsidies on firm performance: an empirical study , 2004 .

[47]  D. P. Leyden,et al.  Public Sector Entrepreneurship: U.S. Technology and Innovation Policy , 2015 .

[48]  Anthony Howell.  Firm R&D, Innovation and Easing Financial Constraints in China: Does Corporate Tax Reform Matter? , 2016 .

[49]  John T. Scott,et al.  The Nature of Innovation Market Failure and the Design of Public Support for Private Innovation , 2000 .