Institutions and Innovation: an analysis among countries from 2006 to 2013

Abstract

This paper has investigated the hypothesis that there is a positive association between quality of the institutional arrangements and good conditions for innovation. The theoretical approach that underlays the hypothesis is the new institutional economics, it has been related institutional quality with conditions for the development of private enterprise in the context of a stable rule of law, which defends contracts and protects private property, with a limited degree of interventionism. In order to examine this hypothesis, it has created a panel model for sample of 106 countries, covering the period 2006-2013. Results suggest that the quality of institutional arrangements have positive effects in the factors that promote innovation process. Specifically, our results provide evidence that the protection of property rights, judicial independence, the relative burden of state regulation and confidence on  police are institutional factors that have exerted a significant positive influence on innovation.