Design versus utility innovation: Is corruption sanding or greasing the wheels of innovation?

Goel, Rajeev K.; Saunoris, James W.

doi:10.1002/mde.3142

Cited by 8 publications

(7 citation statements)

References 31 publications

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“…These findings can be seen as complementary to results in the literature that show corruption to facilitate the market introduction of innovations (Goel & Nelson, 2018). On the other hand, when a distinction is made between design and utility patents, the greasing effect of corruption on innovation production does not necessarily hold, at least not for the United States-see Goel and Saunoris (2020). From a broader policy perspective, these spillovers from corruption might make a case for tolerating some level of corrupt activity.…”

Section: Discussion Of Resultssupporting

confidence: 59%

“…The greasing effect of corruption has some support in the literature, albeit in studies focusing on different aspects of technological change. Goel and Nelson (2018) found that corruption greased the introduction of process innovations to the market across countries, while, considering data across U.S. states and distinguishing between design and utility patents, Goel and Saunoris (2020) show that the greasing effect of corruption does not hold, and the influence of the timing of corruption effects is sensitive to the type of innovation considered. The current paper, on the other hand, considers the impact of corruption on the efficiency in the production of innovations.…”

Section: Full Samplementioning

confidence: 99%

“…Conversely, greater economic prosperity might imply comfort with the status quo and make the future payoffs associated with technical change relatively less attractive. 9 Another dimension of uncertainty might be related to economic policies-seeGoel, 2007;William and Fengrong (2022).6 Another dimension that one could consider is to make a distinction across patent types-for example, design versus utility patents (seeGoel and Saunoris, 2020) Goel and Saunoris (2020). use data for the United States, and such cross-national detail in the patent variable is less forthcoming.7 There may be different aspects of R&D (e.g., basic versus applied R&D; private versus government R&D) that might impact innovation differently (see, for examples,Goel et al, 2023;Leyden and Link, 1991;Link, 1982).…”

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confidence: 99%

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Do weak institutions undermine global innovation production efficiency?

Blanco

Goel

2023

J Technol Transf

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This paper focuses on institutional influences on innovation efficiency across countries. Whereas various causes and effects of technological change have been examined, empirical investigations of the efficiency involved in innovation production are relatively few. Using data on a large sample of nations over 2018-2020 and considering corruption, regulatory quality, and state fragility as alternative institutional dimensions, our results show that greater corruption facilitates ("greases") efficiency in the production of innovations. This is also the case with improvements in regulatory quality, while greater state fragility increases inefficiency. These findings for the overall sample are somewhat different for the OECD and non-OECD subsamples, although the greasing effect of corruption remains throughout. A robustness check with patent protection and government size as alternative institutional dimensions is also conducted.

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Section: Discussion Of Resultssupporting

confidence: 59%

Section: Full Samplementioning

confidence: 99%

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confidence: 99%

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Do weak institutions undermine global innovation production efficiency?

Blanco

Goel

2023

J Technol Transf

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“…Greater corruption may act as an impediment or an enabler to firms' operations (Goel & Saunoris, 2020). Third, the presence of informal sector firms (INFORMAL), who do not pay taxes or adhere to regulations and undermine potential payoffs from research, is another indication of weak institutions.…”

Section: Empirical Modelmentioning

confidence: 99%

Does capacity utilization crowd‐out research activity? Cross‐national evidence from firm‐level data

Faria,

Goel,

Nelson

2023

Manage Decis Econ

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Focusing on a relatively under‐researched aspect, this paper examines the impact of capacity utilization by firms on their propensities to engage in research and development (R&D). Capacity utilization is related to a firm's current operations, while R&D is forward‐looking, related to the generation of new products and processes. Using a simple theoretical model to set up the hypothesis that greater capacity utilization lowers the incentives of firms to engage in research, our empirical research, based on survey data from thousands of firms across scores of nations, supports this hypothesis. Other results point to the importance of firm characteristics, as well as the perceptions about corruption and the informal sector. Some implications for policy are discussed.

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“…In addition, corruption could affect product and process innovation activities. For example, public officials may ask for bribes from product innovators in exchange for granting a patent for a newly developed product (Goel & Saunoris, 2020). In the context of process innovation, corruption could affect the probability of process innovation taking place (Goel & Nelson, 2018) by increasing the costs of firms' investments in machinery, which are important to introducing innovations (Paunov, 2016).…”

Section: Introductionmentioning

confidence: 99%

The roles of foreign and domestic ownership in the corruption–firm innovation nexus

Ashyrov,

Tasane

2023

Bulletin of Econ Res

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Previous literature has shown the detrimental impact of corruption on innovation. Conversely, the grease‐the‐wheel effect, in bribing fuelling firm innovation, has found some empirical support too. Past studies show that foreign‐owned firms largely outperform domestic firms in innovation activities. However, little is known about how corruption in developing countries might shape the advantages of foreign‐owned firms to innovate. We explored whether bribery, as an institutional dysfunctionality, is differently associated with innovation in the context of foreign owned versus domestically owned firms that operate in overall low research and development intensive economies and engage in exporting. By applying recursive bivariate probit regression, we investigated the link between bribery and innovation engagement among 4118 domestically and foreign‐owned exporting firms from 34 developing countries, using data from the World Bank Enterprise Surveys and other databases. We find evidence on the grease‐the‐wheel effect so that bribery has a stimulating effect on innovation among domestically as well as foreign‐owned exporting firms. These findings underscore the importance for developing countries of finding institutional and policy solutions to coordination failure in combatting corruption.

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Design versus utility innovation: Is corruption sanding or greasing the wheels of innovation?

Cited by 8 publications

References 31 publications

Do weak institutions undermine global innovation production efficiency?

Do weak institutions undermine global innovation production efficiency?

Does capacity utilization crowd‐out research activity? Cross‐national evidence from firm‐level data

The roles of foreign and domestic ownership in the corruption–firm innovation nexus

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