{"title":"The impact of country risk on innovation: Global evidence","authors":"Jun Wen , Hai-Peng Duan , Chun-Ping Chang , Xin-Xin Zhao","doi":"10.1016/j.ecosys.2024.101275","DOIUrl":null,"url":null,"abstract":"<div><div>This article examines the impact of country risk on the level of innovation. Through empirical analysis of unbalanced panel data from 106 countries around the world from 1990 to 2020, we find that reducing country risk has a pro-innovation effect, and this conclusion holds after a series of robustness tests. We also find that the impact of country risk on innovation is more significant in countries with better infrastructure, democracies, lower income, lower political stability, and countries governed by left-wing parties. The impact of country risk on innovation is also more significant in high-tech industries than in traditional manufacturing industries. The mechanism analysis shows that country risk reduction promotes innovation by increasing and improving government efficiency, human capital, and the business environment. This study expands the research areas related to country risk and provides evidence for understanding the relationship between country risk and innovation.</div></div>","PeriodicalId":51505,"journal":{"name":"Economic Systems","volume":"49 2","pages":"Article 101275"},"PeriodicalIF":3.3000,"publicationDate":"2025-06-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Systems","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0939362524000979","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This article examines the impact of country risk on the level of innovation. Through empirical analysis of unbalanced panel data from 106 countries around the world from 1990 to 2020, we find that reducing country risk has a pro-innovation effect, and this conclusion holds after a series of robustness tests. We also find that the impact of country risk on innovation is more significant in countries with better infrastructure, democracies, lower income, lower political stability, and countries governed by left-wing parties. The impact of country risk on innovation is also more significant in high-tech industries than in traditional manufacturing industries. The mechanism analysis shows that country risk reduction promotes innovation by increasing and improving government efficiency, human capital, and the business environment. This study expands the research areas related to country risk and provides evidence for understanding the relationship between country risk and innovation.
期刊介绍:
Economic Systems is a refereed journal for the analysis of causes and consequences of the significant institutional variety prevailing among developed, developing, and emerging economies, as well as attempts at and proposals for their reform. The journal is open to micro and macro contributions, theoretical as well as empirical, the latter to analyze related topics against the background of country or region-specific experiences. In this respect, Economic Systems retains its long standing interest in the emerging economies of Central and Eastern Europe and other former transition economies, but also encourages contributions that cover any part of the world, including Asia, Latin America, the Middle East, or Africa.