Institutions and the Direction of Innovative Search: Change and Persistence Between and Within Countries

39 Pages Posted: 18 Jul 2015

See all articles by Denisa Mindruta

Denisa Mindruta

HEC Paris - Strategy & Business Policy

Joao Albino Pimentel

HEC Paris - Strategy & Business Policy

Glenn Hoetker

Arizona State University (ASU) - W.P. Carey School of Business

Date Written: July 15, 2015

Abstract

This paper examines the impact of the macro-institutional environment on exploitative-explorative innovation. Building on organizational learning, institutional economics, and innovation studies, we identify country-level institutions that might foster or hinder firms’ incentives and ability to explore or exploit. We test our conjectures by analyzing all patented firm innovations in 22 countries over the 1985-2008 timeframe. Empirical tests demonstrate the role of national institutions in explaining cross-country differences in the level of exploitative and exploratory innovation. The results also suggest that firms’ incentives to explore are influenced by changes in the institutions that regulate the ecology of competition in an economy.

Keywords: Exploration versus exploitation, Innovation and R&D, Patents, Institutional environment, Panel data

Suggested Citation

Mindruta, Denisa and Albino Pimentel, Joao and Hoetker, Glenn, Institutions and the Direction of Innovative Search: Change and Persistence Between and Within Countries (July 15, 2015). HEC Paris Research Paper No. SPE-2015-1095. Available at SSRN: https://ssrn.com/abstract=2630948 or http://dx.doi.org/10.2139/ssrn.2630948

Denisa Mindruta (Contact Author)

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Joao Albino Pimentel

HEC Paris - Strategy & Business Policy ( email )

Jouy-en-Josas Cedex, 78351
France

Glenn Hoetker

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

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