Financial system specialization and private research and development expenditure: research for OECD countries

Purpose The purpose of this paper is to analyse the role that different financial sources and financial specialization have on private research and development (R&D) activity in OECD countries. Design/methodology/approach The authors developed several panel regressions choosing as a final model a two-way random effects regression to understand which funding sources are related to the R&D expenditure, and how financial specialization has links to the private portion of R&D aggregated expenditure. The authors include data from the years 2000 to 2016 for OECD countries. Findings The results reinforce the critical role that stock markets have in enhancing private R&D and that bond markets have an inverse relationship with private R&D national expenditures. The authors do not find evidence of a link between bank sources and private R&D. Specialized financial systems (banking or market) support innovation in a better way than a mixed arrangement of those two systems. Practical implications The findings of this study have considerable policy implications. Policymakers need to be aware of these results, given that some variables related to financial markets, seems to boost the inputs for R&D. In the long term, this could be a signal that national and regional systems of innovation need a broad view of the factors hampering scientific activity, and also a signal that there are other ways to impact the results of the complex innovation activity through the development of stronger financial systems backing up national systems of innovation. Originality/value The authors found that the long discussion about the financial system that a country has to choose to enhance growth with R&D&I may have been misleading the public policy. The findings show that rather than a bank or a stock market financial system, economies looking to boost R&D&I, must specialize in one of the two systems, deepen these and generate the appropriate policies to promote science, technology and innovation using those financial markets.

National systems of innovation in the Eurozone: Policy implications for Spain

This paper aims to understand which innovation inputs are more strongly related to innovation outputs in the Eurozone, and to derive policy implication for the Spanish convergence with Eurozone top players in terms of innovation. Drawing from the Global Innovation Index input-output framework we developed an alternative longitudinal index. The resulting country scores were used to construct a panel dataset composed of the 19 Eurozone members during the period 2013-2018, which were analysed through a series of multiple regression techniques. Results suggest a strong and positive influence of Business Sophistication on innovation outputs in Eurozone countries, derived mainly from the capacity of domestic firms to absorb knowledge. Possible implications for Spain could be derived from this fact, such as, for instance, encouraging inward foreign direct investment. Future research is needed to analyse the differentiated effects of such encouragement, as well as other surprising results of our study.

Systems of environmental innovation: sectoral and technological perspectives on ballast water treatment systems

The research on innovation in the maritime sector has commonly focused on the implementation of innovation rather than on more complex issues such as the interplay between technological aspects, market conditions, and, particularly, regulatory regimes in shaping the emergence and growth of global systems involved with the development, production, and use of environmental innovation. Therefore, this paper sets out to analyze—by combining insights from sectoral (SSI) and technological (TIS) systems of innovation concepts—ballast water treatment systems (BWTS), designed to prevent the negative impacts of invasive species, as an example of such complex interaction. The results show how public policy and institutional acceptance have shaped the market for BWTS. First, BWTS were induced by environmental regulations mandating their use. Second, the demand for BWTS increases substantially when the implementation date of the regulations approaches. Third, differences in regulatory regimes shape the demand for various available technologies. Without coordinated regulations, this unclear operating environment remains a definite concern for shipowners when choosing the specific type of BWTS technology for onboard installation. The results also underline that the combined SSI/TIS framework, utilized in this paper, is a feasible analytical framework for studying environmental innovation.

How do social entrepreneurs develop technological innovation?

Purpose The present study attempts to analyze how social entrepreneurs (SEs) develop technological innovation in the face of diverse institutional logics, which are embedded in the National Systems of Innovation (NSI). Design/methodology/approach Based on the content analysis of Ashoka Fellows, the study compares SEs in developed and developing countries, which represent strong versus weak NSIs. Findings SEs selectively couple the elements of diverse institutional logics to ensure the resource inflow and legitimacy of their operations. However, SEs particularly at weak NSIs are also decoupling their profit and non-for-profit branches to address conflict among diverse logics. Moreover, the study finds that 12 out of 20 entrepreneurs who identify themselves as technologically innovative did not develop any new technological innovation. Practical implications The study shows that being technologically innovative depends on the acquisition of resources and the management of legitimacy challenges, SEs can diversify their innovations by creating more incremental, architectural and modular innovations to address competing demands among logics. Social implications The study reveals that SEs in weak NSIs interact with multiple institutional logics more frequently than their counterparts in strong NSIs. Although this context leads them to diversify their technological innovation, there is a need for improving the NSIs of SEs in developing countries to facilitate the continuity of resource inflow and ensure the legitimacy of their operations. Originality/value Integrating two complementary theoretical lenses, the study contributes to the literature by exploring the impact of the interaction between logics nested within a supra system and SEs’ ability to develop technological innovation.