Do good institutions enhance the effect of technological spillovers on productivity? Comparative evidence from developed and transition economies

Abstract

This paper argues that institutional quality has both direct and indirect (moderating) effects on productivity of countries. These hypotheses are tested using a battery of institutional proxies (governance, economic freedom, intellectual property rights and ease of doing business) and two channels for technological spillovers (trade and FDI) in a panel of developed and transition economies. The results confirm that good institutions have positive and similar effects on productivity across the board. Moreover, they moderate the relationship between foreign technological spillovers and productivity, contingent on the specifics of institutional proxies and countries considered. Thus, governance, IPR and economic freedom exhibit negative moderation in the case of transition economies, while easiness of doing business moderates positively this relationship for both groups of countries. The moderation effects are larger for transition economies and trade-related spillovers. Overall, these results suggest a trade-off for transition countries between pursuing institutional upgrades and increasing their gains from technological spillovers.

Greasing the Wheels of Change: Bribery, Institutions, and New Product Introductions in Emerging Markets

“…Finally, a high level of societal trust will reduce the efficiency of bribes in greasing new products by undermining firms' ability to tap knowledge from the national and regional "innovation systems" in which they are embedded (Lundvall, 2002;Krammer, 2015). While bribery may serve as a quicker alternative for capitalization of a firm's new product innovation in the short term, its long-term performance hinges on accessing new knowledge from networks of collaborators and partners (Chryssochoidis & Wong, 1998) to develop and adapt new products (Harvey & Griffith, 2007).…”

Science, technology, and innovation for economic competitiveness: The role of smart specialization in less-developed countries

“…These environments provide a far-less-than-ideal setting for implementing SS by suffering from low entrepreneurship rates (Carre and Thurik, 2008), weak systems of innovation (Krammer, 2009), limited technological opportunities (Krammer, 2016), significant institutional heterogeneity (Krammer, 2015a), lack of significant regional autonomy (Charles et al, 2012) and market-driven clusters (Bröchler and Kalentzis, 2017). Together, all these issues raise significant concerns regarding the successful implementation of SS strategies for such "laggard" regions or countries, particularly when targeting techno-economic development (Phillips et al, 2016).…”

Human resource policies and firm innovation: The moderating effects of economic and institutional context

“…Second, we contribute to the institution-based view of the firm (Peng, Sun, Pinkham and Chen, 2009) by demonstrating the indirect effect of formal institutions, as captured by labour regulations, in moderating the relationship between HR practices and firm innovation. While extant studies have examined the direct role of institutions in determining firm performance (Hitt et al, 2000;Yasar, Paul, and Ward, 2011;Fuentelsaz, Garrido, and Maicas, 2020), our knowledge of the nature and magnitude of the indirect effects of institutions remains scant (Lu, Liu, Wright and Filatotchev, 2014;Krammer, 2015), and in particular towards explicating the external factors that enable or deter innovation performance (Krammer, 2019).…”