Country Matters: How National Institutions Influence the Productivity of Firm R&D



This study examines how the institutional context under which firms conduct their R&D activities affects the productivity of these efforts.  We suggest that national institutions influence the accumulation and diffusion of knowledge within national boundaries.  Knowledge rich institutional contexts offer better opportunities for firms to augment the combinatory potential of their knowledge stocks and improve the productivity of their R&D investments.  Our results reveal that firms operating in countries with institutions that favor the availability of domestic knowledge—skilled human capital, technological sophistication, inter-organizational collaboration, and market openness—are more effective at recovering their investments in R&D than their counterparts. 
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Carolien Heinjes