The Impact of National Culture on Innovation A Comparative Analysis between Developed and Developing Nations during the Pre and Post Crisis Period 2007_2021

TL;DR

This study examines how Hofstede's cultural dimensions influence innovation in developed and developing nations across different periods, revealing that income level affects this relationship and cultural impact diminishes in developing countries over time.

Contribution

It provides a comparative analysis of cultural impacts on innovation during pre- and post-crisis periods, highlighting the changing influence of culture in different income groups.

Findings

Cultural properties are consistently linked to innovation performance regardless of crisis periods.

Income group significantly influences the relationship between culture and innovation.

Cultural impact on innovation has decreased in developing countries in recent years.

Abstract

This empirical study investigates the impact of the Hofstede cultural dimensions (HCD) on the Global Innovation Index (GII) scores in four different years (2007, 2009, 2019 and 2021) to compare the impacts during the pre- and post-crisis (financial and COVID-19) period by employing ordinary least square (OLS) and robust least square (Robust) analyses. The purpose of this study is to identify the impact of cultural factors on the innovation development for different income groups during the pre- and post-crisis period. We found that, in general, the same cultural properties were required for countries to enhance innovation inputs and outputs regardless of pre- and post-crisis periods and time variances. The significant cultural factors (driving forces) of the innovation performance do not change over time. However, our empirical results revealed that not the crisis itself but the income group (either developed or developing) is the factor that influences the relationship between cultural properties and innovation. It is also worth noting that cultural properties have lost much of their impact on innovation, particularly in developing countries, during recent periods. It is highly likely that in terms of innovation, no cultural development or change can significantly impact the innovation output of developing countries without the construction of the appropriate systems.