The Impact of Institutions on Innovation

Abstract

We study the impact of inclusive institutions on innovation using novel, hand-collected, county-level data for Imperial Germany. We use the timing and geography of the French occupation of different German regions after the French Revolution of 1789 as an instrument for institutional quality. We find that the number of patents per capita in counties with the longest occupation was more than double that in unoccupied counties. Among the institutional changes brought by the French, the introduction of the Code civil, ensuring equality before the law, and the promotion of commercial freedom through the abolition of guilds and trade licenses had a stronger effect on innovation than the abolition of serfdom, which increased labor market mobility, and agricultural reforms that broke up the power of rural elites. The effect of institutions on innovation is particularly pronounced for high-tech innovation, suggesting that innovation might be a key channel through which institutions ultimately affect economic growth. Our findings highlight inclusive institutions as a first-order determinant of innovation.This paper was accepted by Gustavo Manso, finance.

The Impact of Land-Use Mix on Technological Innovation: Evidence from a Grid-Cell-Level Analysis of Shanghai, China

“…For instance, this result indicates that grids that are closer to metro stations are likely to be associated with more patents, ceteris paribus. Generally, this result is in line with the empirical findings of other studies that have analyzed the role of spatial agglomeration and accessibility in facilitating the technological innovation process [1,6,[9][10][11]26,32]. However, the coefficients of the other three control variables, which reflect the impact of service facilities on technological innovation, are statistically insignificant (except for Sport_ f acility), and their signs are all negative.…”

“…The other control variable Research_den is the number of research facilities that each grid contains. These research facilities generally include labs and engineering technology centers at the provincial level or above, which is one of the common variables that have been controlled for in the literature [9][10][11]20]. Based on the empirical findings of existing studies, both variables are expected to be positively associated with technological innovation.…”

“…With technological innovation playing an increasingly important role in promoting urban and regional development, much attention has been paid to investigating the determinants of the economic geography of technological innovation [1][2][3]. The traditional drivers of technological innovation that have been well documented in the literature generally include research and development (R&D) input [3][4][5], social and human capital [2,[6][7][8], universities and research institutes [9][10][11], and external knowledge linkages [5,12,13]. While these studies have mainly focused on socioeconomic factors that could influence the geography of technological innovation, recent studies have also investigated the relationship between the geography of technological innovation and broadly defined built environment factors.…”

Canada's Ocean Supercluster initiative: A national policy in regional clothing?

“…Much of the research on innovation and development identifies institutional frameworks as key determinants of local innovation‐led development trajectories (Donges et al, 2022; Grillitsch, 2016; Pike et al, 2017). Indeed, many lagging regions suffer from institutional deficiencies or thinness (Hassink & Gong, 2019; Sanchez‐Carreira et al, 2019; Trippl et al, 2019): institutional frameworks can either hinder or facilitate the formation of regional innovation systems, and some regions may simply not be large or varied enough to support such a system.…”

Systems of innovation: Path of economic transition and differences in institutions in central and Eastern Europe?

“…This observation is explained by the fact that technological followers, instead of undergoing the resource‐intensive process of developing their technologies, catch up with the technological leaders by adapting to the already existing technological developments (Barro & Sala‐i‐Martin, 1997; Niebuhr & Schlitte, 2009). Thus, the innovation environment and institutional setting can play a role in this context (Acemoglu et al., 2014; Donges et al., 2022).…”