Motivated by theoretical arguments (see e.g. Romer, 2010, Mokyr, 2008) that assert a positive impact of institutions on R&D, this paper aims to provide some empirical analysis on the relationship between the two variables. In particular, using a core sample of 98 countries over the period 1996–2009, this paper has found a significant direct effect of institutions on R&D intensity. Countries with better institutions qualities as captured by the World Banks’ Worldwide Governance Indicators (WGI) tend to attract more scientists and engineers into the research field and to spend more on R&D as well. This paper has also found evidence that the effect of institutions varies in different economies characterized by different levels of financial development and human capital accumulation, but stays relatively unchanged across countries with different levels of trade openness.

Item Type:	Refereed Article
Keywords:	institutions, innovative activity, economic growth
Research Division:	Economics
Research Group:	Applied economics
Research Field:	Macroeconomics (incl. monetary and fiscal theory)
Objective Division:	Economic Framework
Objective Group:	Macroeconomics
Objective Field:	Economic growth
UTAS Author:	Wang, C (Dr Cong Wang)
ID Code:	128118
Year Published:	2013
Web of Science® Times Cited:	17
Deposited By:	TSBE
Deposited On:	2018-09-03
Last Modified:	2018-10-10
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