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Freedom and innovation: a country and state level analysis

Research paper by Erik E. Lehmann, Nikolaus Seitz

Indexed on: 26 Apr '16Published on: 25 Apr '16Published in: The Journal of Technology Transfer



Abstract

Research underlines the importance of socio-cultural factors when establishing a supportive environment for innovation and entrepreneurship growth. Scholars discuss different aspects, ranging from cultural attitudes and religious norms, to aspects of tolerance and social freedom. Following on research tradition, this paper analyzes the freedom-innovation relationship using a hand collected data set of 57 countries and the 50 U.S. states over a 3 year period. We argue and test whether the slope of the freedom-innovation link is shaped by and trades-off the costs and benefits of either weak or strong social ties within a country. Our empirical findings support a positive relationship between the freedom-innovativeness-slope, but not a negative or inverted U-shaped relationship.