Macro-Institutional Instability and the Incentive to Innovate

Serena Masino

MPRA Paper from University Library of Munich, Germany

Abstract: This paper investigates the channels through which macroeconomic and institutional instability prevents or hinders innovative investment undertakings financed by the domestic private sector. The analysis is based on a sample of 44 countries representing all levels of development and considers a number of instability dimensions. The results suggest a negative impact of real, monetary and political instability on the aggregate level of national R&D financed by the business sector. Thus, they highlight the desirability of stable macro-institutional environments in preventing avoidance or abandonment of private innovation undertakings.

Keywords: Macroeconomic Volatility; Political Instability; R&D Investment; Innovation (search for similar items in EconPapers)
JEL-codes: C33 O11 O31 O33 (search for similar items in EconPapers)
Date: 2013-03-17
New Economics Papers: this item is included in nep-ino and nep-mac
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Related works:
Working Paper: Macro-Institutional Instability and the Incentive to Innovate (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45178

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