Innovation, Institutions, and Entrepreneurship

29 Pages Posted: 4 Feb 2016 Last revised: 7 Sep 2016

Date Written: February 3, 2016

Abstract

The literature has emphasized the role of market institutions in fostering entrepreneurship with a purpose of examining entrepreneurship and growth. However, the real driving force is innovation, not entrepreneurship, and many studies treat entrepreneurship as only a proxy for innovation. We use the Global Innovation Index to directly measure the effect of market institutions on innovation and find a very strong positive correlation. We also find that the effect of market institutions on innovation becomes stronger in developed economies and democracies but is unrelated to education. Lastly, the legal system, sound money, and free trade contribute the most to innovation.

Keywords: entrepreneurship, innovation, institutions

JEL Classification: M13, O17, O31

Suggested Citation

Boudreaux, Christopher, Innovation, Institutions, and Entrepreneurship (February 3, 2016). Available at SSRN: https://ssrn.com/abstract=2727241 or http://dx.doi.org/10.2139/ssrn.2727241

Christopher Boudreaux (Contact Author)

Florida Atlantic University ( email )

777 Glades Road
KH 145
Boca Raton, FL 33431
United States

HOME PAGE: http://home.fau.edu/cboudreaux/web/

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
151
Abstract Views
830
Rank
351,123
PlumX Metrics