The roles of formal and informal institutions on innovations activity

This paper analyses the impact of institutions on the innovation level of countries. This analysis is performed by segregating the dimension of institution into two, namely formal institutions and informal institutions. Using samples of 62 cross-section countries and employing robust standard erro...

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Main Authors:	Lee, Weng Chang, Law, Siong Hook
Format:	Article
Language:	English
Published:	Penerbit Universiti Kebangsaan Malaysia 2016
Online Access:	http://journalarticle.ukm.my/10788/ http://journalarticle.ukm.my/10788/ http://journalarticle.ukm.my/10788/1/jeko_50%282%29-14.pdf

id	ukm-10788
recordtype	eprints
spelling	ukm-107882017-10-10T09:31:11Z http://journalarticle.ukm.my/10788/ The roles of formal and informal institutions on innovations activity Lee, Weng Chang Law, Siong Hook This paper analyses the impact of institutions on the innovation level of countries. This analysis is performed by segregating the dimension of institution into two, namely formal institutions and informal institutions. Using samples of 62 cross-section countries and employing robust standard error ordinary least squares (OLS) estimation, this study has found evidence that both formal and informal institutions affect the innovation level of countries. The results suggest that countries with higher formal institutions (institutional quality) and higher informal institutions (social capital) are associated with higher innovation levels. However, informal institutions demonstrate that at 10th percentile quantile estimations it exhibit a significant positive impact on innovation, while the formal institutions show such impact after exceeding the 50th percentile. Hence, this result suggests the formal institutions play important role when innovation level in a country is high. Both formal and informal institutions are crucial in influencing the level of country’s innovation. Penerbit Universiti Kebangsaan Malaysia 2016 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/10788/1/jeko_50%282%29-14.pdf Lee, Weng Chang and Law, Siong Hook (2016) The roles of formal and informal institutions on innovations activity. Jurnal Ekonomi Malaysia, 50 (2). pp. 167-179. ISSN 0127-1962 http://www.ukm.my/fep/jem/content/2016-2.html
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	This paper analyses the impact of institutions on the innovation level of countries. This analysis is performed by segregating the dimension of institution into two, namely formal institutions and informal institutions. Using samples of 62 cross-section countries and employing robust standard error ordinary least squares (OLS) estimation, this study has found evidence that both formal and informal institutions affect the innovation level of countries. The results suggest that countries with higher formal institutions (institutional quality) and higher informal institutions (social capital) are associated with higher innovation levels. However, informal institutions demonstrate that at 10th percentile quantile estimations it exhibit a significant positive impact on innovation, while the formal institutions show such impact after exceeding the 50th percentile. Hence, this result suggests the formal institutions play important role when innovation level in a country is high. Both formal and informal institutions are crucial in influencing the level of country’s innovation.
format	Article
author	Lee, Weng Chang Law, Siong Hook
spellingShingle	Lee, Weng Chang Law, Siong Hook The roles of formal and informal institutions on innovations activity
author_facet	Lee, Weng Chang Law, Siong Hook
author_sort	Lee, Weng Chang
title	The roles of formal and informal institutions on innovations activity
title_short	The roles of formal and informal institutions on innovations activity
title_full	The roles of formal and informal institutions on innovations activity
title_fullStr	The roles of formal and informal institutions on innovations activity
title_full_unstemmed	The roles of formal and informal institutions on innovations activity
title_sort	roles of formal and informal institutions on innovations activity
publisher	Penerbit Universiti Kebangsaan Malaysia
publishDate	2016
url	http://journalarticle.ukm.my/10788/ http://journalarticle.ukm.my/10788/ http://journalarticle.ukm.my/10788/1/jeko_50%282%29-14.pdf
first_indexed	2023-09-18T19:58:26Z
last_indexed	2023-09-18T19:58:26Z
_version_	1777406686512807936

The roles of formal and informal institutions on innovations activity

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