Institutions and Innovation: Evidence from Countries at Different Stages of Development

2017 ◽  
Vol 56 (4) ◽  
pp. 297-317
Author(s):  
Zafir Ullah Khan ◽  
Anwar Hussain ◽  
Nasir Iqbal
Keyword(s):  
Developing Countries ◽  
Developed Countries ◽  
Informal Institutions ◽  
Country Risk ◽  
Innovation Performance ◽  
Formal Institutions ◽  
Stages Of Development ◽  
World Value Survey ◽  
Formal And Informal Institutions ◽  
The Impact

This paper empirically analyses the impact of institutions, both formal and informal, on innovation performance of sampled countries at different stages of development. Data of 72 sampled countries on Research and Development Expenditures, numbers of article published, human capital, trade openness, internet users are collected from United Nations Educational, Scientific and Cultural Organisation (UNESCO), International Country Risk Guide (ICRG) and World Bank database. Formal and informal institutions indexes are constructed using data from Country Risk Guide and The World Value Survey (WVS). Fixed effect and System GMM technique are used to estimate the dynamic relationship between innovation performance and institutional indexes. The study finds positive significant effect of institutions on innovation in case of aggregate sample of developed and developing countries. However, the effects of formal institutions are more significant in case of sample of developed countries, while in developing countries informal institutions are found more effective than formal institutions in affecting innovation performance. The results also show that both formal and informal institutions are supplementary to each other in case of developing countries. Therefore, it is suggested that focus should be given to informal institutions. Moreover, collective initiatives be encourage in developing countries to have diverse ideas from different sectors of the countries. In addition, developing countries should initiate collaborative research projects with technologically advanced countries research and education institutions so as to learn from each other’s ideas and experiences. Keywords: Formal Institutions, Informal Institutions, Innovation

scholarly journals The Impact of Interplay between Formal and Informal Institutions on Innovation Performance: Evidence from CEECs

2021 ◽  
Vol 32 (1) ◽  
pp. 15-26
Author(s):  
Malgorzata Godlewska
Keyword(s):  
Legal System ◽  
Negative Impact ◽  
Positive Impact ◽  
Innovation Policy ◽  
Informal Institutions ◽  
Innovation Performance ◽  
Formal Institutions ◽  
Formal And Informal Institutions ◽  
National Economies ◽  
The Impact

Formal and informal institutions matter in the context of the innovation performance of Central and Eastern European countries (CEECs). The purpose of the research was to investigate whether the interplay between formal and informal institutions has a positive, negative or neutral impact on the innovation performance of CEECs, and if formal or informal institutions alone also have a positive, negative or neutral influence on the innovation performance of CEECs. The research is based on informal institutions of CEECs such as trust, traditions, customs, creativity or cooperation, and formal institutions of CEECs such as law, formal rules, or science, technology and innovation policy (STIP). The research methodology focuses on secondary statistical data from 18,808 surveys from the European Social Survey Round 9 (2018) edition 2.0 for informal institutions and from 1090 innovation policies of European Commission and OECD STIP Compass and 414,073 notices of awarded tenders of the European Union Tenders Electronic Daily for formal institutions. Innovation performance was measured by the Summary Innovation Index (SII) of the European Innovation Scoreboard 2019. The findings show that informal institutions such as trust in others, trust in the legal system, the importance of following traditions and customs or cooperation among citizens of CEECs, as well as interplay between informal institutions such as trust in the legal system and formal institutions such as obedience to rules among citizens of CEECs have a negative impact on the innovation performance of the national economies of CEECs. Meanwhile, the variety of policy theme areas and creativity among citizens of CEECs have a positive impact on the innovation performance of the national economies of CEECs.

Network centrality and innovation performance: the role of formal and informal institutions in emerging economies

2019 ◽  
Vol 34 (6) ◽  
pp. 1388-1400 ◽  
Author(s):  
Haifeng Wang ◽  
Yapu Zhao ◽  
Beilei Dang ◽  
Pengfei Han ◽  
Xin Shi
Keyword(s):  
Social Cohesion ◽  
Emerging Economies ◽  
Informal Institutions ◽  
Innovation Performance ◽  
Network Centrality ◽  
Entrepreneurial Firms ◽  
Content Type ◽  
Growth Enterprise Market ◽  
Formal And Informal Institutions ◽  
The Impact

Purpose The impact of network centrality on innovation performance is inconclusive. The purpose of this paper is to examine how formal and informal institutions affect the influence of network centrality on firms’ innovation performance in emerging economies by integrating social network theory and institutional theory. Design/methodology/approach Multisource and lagged data from 234 technology-based entrepreneurial firms listed on the Chinese Growth Enterprise Market were leveraged to test a proposed research model. Findings Results suggest that formal institutions (marketization) positively moderate the relationship between network centrality and innovation performance, whereas informal institutions (social cohesion) negatively moderate this relationship. Moreover, formal and informal institutions have a strong joint impact on such relationship, that is, the effect of network centrality on innovation performance is most positive when marketization is high and social cohesion is low. Originality/value This empirical research provides new insights into whether and how firms can grasp the innovation benefits of network centrality by exploring institutional contingencies. It further sheds on light the scope of the network centrality–innovation issue by extending its research context to Chinese entrepreneurial firms.

scholarly journals The Impact of Institutions on the Evolution of Tourism Accommodation Format: Evidence from Wulingyuan, China

2019 ◽  
Vol 11 (10) ◽  
pp. 2882
Author(s):  
Ting Jiang ◽  
Shaobing Zhuo ◽  
Chaozhi Zhang ◽  
Jun Gao
Keyword(s):  
Sustainable Development ◽  
Informal Institutions ◽  
Evolution Process ◽  
Formal Institutions ◽  
Tourist Destination ◽  
The Sustainable Development ◽  
Formal And Informal Institutions ◽  
Industry Needs ◽  
The Impact ◽  
Current Stage

This paper examines the impact of institutions on evolution of tourism accommodation format in Wulingyuan, a well-known tourist destination in China, from the perspective of institutional cluster embeddedness. Data were primarily collected through interviews and participant observations. The findings show a five-stage evolution process starting from introduction (1982–1988), through growth (1989–2000), adjustment (2001–2004), and upgrade (2005–2010) to the current stage of individualization (2011–present). During the process, the informal institutions work to suppress, conflict with the formal institutions, yet transform into formal institutions in the end. In such a process, institutional loopholes and frictions are the norm, and tourism accommodation format evolves from extensive development to sustainable development. It suggests that the sustainable development of the tourism accommodation industry needs the synergy of formal and informal institutions.

scholarly journals The Impact of Sustainability Awareness and Moral Values on Environmental Laws

2021 ◽  
Vol 13 (11) ◽  
pp. 5882
Author(s):  
Rita Yi Man Li ◽  
Yi Lut Li ◽  
M. James C. Crabbe ◽  
Otilia Manta ◽  
Muhammad Shoaib
Keyword(s):  
Sustainable Development ◽  
Developing Countries ◽  
Environmental Law ◽  
Developed Countries ◽  
Moral Values ◽  
Web Pages ◽  
Environmental Legislation ◽  
Environmental Laws ◽  
Academic Publications ◽  
The Impact

We argue that environmental legislation and regulation of more developed countries reflects significantly their moral values, but in less developed countries it differs significantly from their moral values. We examined this topic by using the keywords “sustainability” and “sustainable development”, studying web pages and articles published between 1974 to 2018 in Web of Science, Scopus and Google. Australia, Zimbabwe, and Uganda were ranked as the top three countries in the number of Google searches for sustainability. The top five cities that appeared in sustainability searches through Google are all from Africa. In terms of academic publications, China, India, and Brazil record among the largest numbers of sustainability and sustainable development articles in Scopus. Six out of the ten top productive institutions publishing sustainable development articles indexed in Scopus were located in developing countries, indicating that developing countries are well aware of the issues surrounding sustainable development. Our results show that when environmental law reflects moral values for betterment, legal adoption is more likely to be successful, which usually happens in well-developed regions. In less-developed states, environmental law differs significantly from moral values, such that changes in moral values are necessary for successful legal implementation. Our study has important implications for the development of policies and cultures, together with the enforcement of environmental laws and regulations in all countries.

scholarly journals Formal institutions and the development of entrepreneurial activity – the contingent role of corruption in emerging economies

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Arezou Harraf ◽  
Hasan Ghura ◽  
Allam Hamdan ◽  
Xiaoqing Li
Keyword(s):  
Emerging Economies ◽  
Corporate Entrepreneurship ◽  
Informal Institutions ◽  
Entrepreneurial Activity ◽  
Future Research ◽  
Formal Institutions ◽  
Business World ◽  
Content Type ◽  
Formal And Informal Institutions ◽  
Control Of Corruption

PurposeThe paper aims to analyse the interplay between formal and informal institutions' and their impact on entrepreneurship rates in emerging economies.Design/methodology/approachThis study expands previous research in examining the moderating effect of control of corruption on the relationship between formal institutions and the development of the entrepreneurial activity. The study utilizes longitudinal analyses of a dataset from 41 emerging economies over 11 years (2006–2016).FindingsFindings provided robust support for the study's hypotheses. The results suggested lower levels of corruption positively moderate the effects of a country's number of procedures and education and training on the rates of entrepreneurial activity, while negatively moderating the effects of firm-level technology absorption on the rates of entrepreneurial activity.Research limitations/implicationsThe study has considered only one particular aspect of high-growth entrepreneurship, which is newly registered firms with limited liability. Although newly registered firms are recognized as one of the critical drivers of entrepreneurial activity. Future research should seek to examine other aspects of growth-oriented entrepreneurship such as activities involving a high level of innovation, corporate entrepreneurship or technology developments.Practical implicationsThis study advanced the existing theories in the field of entrepreneurship and institutional economics as it merged the two theories as a driving framework in the design of the study in the context of emerging economies.Social implicationsThe study tested a theoretical model by expanding the number of emerging economies in the study and found comparable findings that explain factors that may influence the likelihood of individuals entering entrepreneurship.Originality/valueThis article adds to the current literature as it highlights the importance of the interplay of formal and informal institutions in determining their impact on entrepreneurship rates in emerging economies. This is of particular importance to policy-makers, and the business world as the empirical results of this study show the benefits of control of corruption in boosting entrepreneurial rates in these economies, which strive for economic diversification in their developmental endeavours.

scholarly journals Taxing impact of terrorism on global economic openness of developed and developing countries

2018 ◽  
Vol 68 (3) ◽  
pp. 311-335
Author(s):  
Abubakr Saeed ◽  
Yuhua Ding ◽  
Shawkat Hammoudeh ◽  
Ishtiaq Ahmad
Keyword(s):  
Developing Countries ◽  
Negative Impact ◽  
Developed Countries ◽  
Terrorist Attacks ◽  
Economic Openness ◽  
Significant Negative Impact ◽  
Military Expenditures ◽  
The Developed Countries ◽  
The Impact ◽  
The Relationship

This study examines the relationship between terrorism and economic openness that takes into account both the number and intensity of terrorist incidents and the impact of government military expenditures on trade-GDP and foreign direct investment-GDP ratios for both developed and developing countries. It uses the dynamic GMM method to account for endogeneity in the variables. Deaths caused by terrorism have a significant negative impact on FDI flows, and the number of terrorist attacks is also found to be significant in hampering the countries’ ability to trade with other nations. The study also demonstrates that the developing countries exhibit almost similar results to our main analysis. The developed countries exhibit a negative impact of terrorism, but the regression results are not significant.

scholarly journals Gender and feminist considerations in Artificial Intelligence from a developing-world perspective, with India as a case study

2021 ◽  
Author(s):  
SANGHAMITRA CHOUDHURY ◽  
Shailendra Kumar
Keyword(s):  
Artificial Intelligence ◽  
Developing Countries ◽  
Developing World ◽  
Developed Countries ◽  
High Level ◽  
The Impact ◽  
The Relationship ◽  
Precarious Situation ◽  
And Robotics

<p>The relationship between women, technology manifestation, and likely prospects in the developing world is discussed in this manuscript. Using India as a case study, the paper goes on to discuss how ontology and epistemology views utilised in AI (Artificial Intelligence) and robotics will affect women's prospects in developing countries. Women in developing countries, notably in South Asia, are perceived as doing domestic work and are underrepresented in high-level professions. They are disproportionately underemployed and face prejudice in the workplace. The purpose of this study is to determine if the introduction of AI would exacerbate the already precarious situation of women in the developing world or if it would serve as a liberating force. While studies on the impact of AI on women have been undertaken in developed countries, there has been less research in developing countries. This manuscript attempts to fill that need.</p>

scholarly journals Service Export Sensitivity to Internet Adoption: Evidence From Dynamic Panel Data Analysis

2020 ◽  
Vol 11 (6) ◽  
pp. 259
Author(s):  
Walid Chatti ◽  
Haitham Khoj
Keyword(s):  
Developing Countries ◽  
Panel Data ◽  
Panel Data Analysis ◽  
Developed Countries ◽  
Dynamic Panel Data ◽  
Dynamic Panel ◽  
Internet Adoption ◽  
The Impact ◽  
Dynamic Panel Data Analysis ◽  
Service Export

This study aims to examine the causal linkages relating service exports to internet penetration for 116 countries over the period 2000-2017. Taking into account a wide panel of countries, we apply 2-Step GMM methodology for dynamic panel data models. The results show a bi-directional causality relating service exports to internet adoption for developed countries. For the global panel and developing countries, we find those same results attest a positive relationship between the internet adoption and service exports, but in the opposite way; the impact is very low and not significant. Regarding developing countries, despite the fact that internet positively affects service exports, it is considered less efficient than in developed countries.

scholarly journals Foreign Shareholdings Impact on Banks Efficiency and Moderating Role of Corporate Governance

2019 ◽  
Vol 8 (2S9) ◽  
pp. 414-425
Keyword(s):  
Developing Countries ◽  
Corporate Governance ◽  
Country Of Origin ◽  
Developed Countries ◽  
Moderating Effect ◽  
Due Diligence ◽  
The Board Of Directors ◽  
The Impact ◽  
Moderating Role

The research investigate the impact of foreign shareholding originated from developed and developing countries on the efficiency of acquired local banks in Indonesia during 2007-2017 by including Corporate Governance as a moderating variable. Methodology: Using the secondary aggregate data of 29 commercial banks acquired by foreign shareholders, a panel regression model using econometrics methods of GLS, and DEA were applied to examine the effects of percentage of foreign shareholdings on efficiency of the acquired local banks. The main findings; First, percentage of foreign shareholdings positively affecting efficiency of acquired local banks only if the foreign shareholders is originated from developed countries. Second, the level of economic advancement of the country of origin of foreign shareholders has significant effects on the efficiency of the acquired local banks. Third, the increase in the size of the Board of Directors tends to decrease the efficiency of the acquired local banks and fourth, the presence of Foreign Director has a positive moderating effect on strengthening the effect of percentage of foreign shareholdings on the efficiency of the acquired local banks. Overall, the originality of this studies is that the percentage of foreign shareholdings and its country of origin are two combined factors that cannot be separated in affecting the level of efficiency of its acquired local bank and the fact of significant positive moderating effect of Foreign Director. As policy consideration, monetary authority need to perform strict due diligence on prospective foreign shareholders specifically originated from developing countries, advise banks to maintain the existence of Foreign Director and to encourage small local banks to be merged prior to the acquisition by foreign shareholders.

scholarly journals The Impact of Interplay Between Formal and Informal Institutions on Corporate Governance Systems: a Comparative Study of CEECs

2018 ◽  
Vol 21 (4) ◽  
pp. 85-104
Author(s):  
Małgorzata Godlewska ◽  
Tomasz Pilewicz
Keyword(s):  
Corporate Governance ◽  
Deductive Reasoning ◽  
Case Study Research ◽  
Individual Case ◽  
Informal Institutions ◽  
Comparative Case Study ◽  
Governance Systems ◽  
Formal And Informal Institutions ◽  
The Impact

The central point of this paper is to present the results of comparative case study research concerning the impact of the interplay between formal and informal institutions in the corporate governance systems (CGS) of Central and Eastern European Countries (CEEC). Particular focus was put on the values of the corporate governance codes (CGC) of CEECs, as well as on transparent ownership structures, transactions with related parties, the protection of minority shareholders, independent members of supervisory boards, and separation between the CEO position and the chairman of the board of directors. The main subject of interest concerns two research areas: the character of the relationship between formal and informal institutions, as well as whether the interplay between them is relevant to the CGSs of CEECs. Moreover, the author investigates whether the CGCs of CEECs consist of regulations that are compatible with the values set up in preambles using research methods such as individual case study or deductive reasoning. The conclusion presented in the paper was drawn on the basis of a review of the literature and research on national and European corporate governance regulations, as well as the CGC of CEECs. The primary contribution this article makes is to advance the stream of research beyond any single country setting, and to link the literature on the interplay between formal and informal institutions related to CGSs in a broad range of economies in transition (‘catch up’ countries) like CEECs. This paper provides an understanding of how the interplay between formal and informal institutions may influence the CGCs of CEECs.

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