Innovation and Sustainable Development: Does Aid and Political Instability Impede Innovation?

Abstract

Sound innovation capabilities help the nations not only to capture bigger market shares but also to sustain long-term economic growth. Innovation is of vital importance at all stages of a country’s development as it promotes productivity, value creation, employment, economic growth, and sustainability. Several factors can affect the innovation activities of a country. For example, peaceful and stable environment, effective macroeconomic designs, sound institutional quality, and efficient utilization of resources are of great significance for a country to nourish economic, business, and market activities. Applying the Auto Regressive Distributive Lag approach to cointegration, this study investigates the short- and long-run impacts of aid, political instability, and terrorism upon the innovation of a laggard economy, namely, Pakistan. Our findings reveal that aid, political instability, and terrorism all have adverse impacts on innovation. Results across robustness checks remain the same. This study is of strong policy implications for policymakers, governments and opposition parties, and security and intelligence agencies to develop sound macroeconomic designs and policies, bring harmony for political stability, and curb terrorism, respectively.

The influence of institutional conditions on firms’ process innovation – evidence from firms based on a multi-country analysis

“…Political instability has also been found to influence attracting foreign direct investments, which is often key to innovativeness in organizations (Shumetie and Watabaji, 2019). Nadeem et al (2020) found that the short- and long-run impacts of aid, political instability and terrorism in Pakistan harmed innovation.…”

Determinants of Advancement in Information Communication Technologies and its Prospect under the role of Aggregate and Disaggregate Globalization

“…Our results show that a 1 percent increase in macroeconomic instability will decrease the advancement of ICT by (0.155289) percent. In the presence of an unstable macroeconomic environment, an economy is unable to make much and sufficient expenditures on the advancement of ICT, thus, an unstable macroeconomic environment discourages the advancement of ICT (Kapurubandara & Lawson, 2006;Nadeem et al, 2020).…”

“…The estimated results show that the availability of physical capital has a positive and significant impact on the advancement of ICT (Ali, 2015;Ali & Rehman, 2015;Barro, 2013;Gokal & Hanif, 2004;Sidrauski, 1967). The results show that there is a negative and significant relationship between macroeconomic instability and the advancement of ICT (Kapurubandara & Lawson, 2006;Nadeem et al, 2020). The findings related to physical capital and macroeconomic instability are in line with the findings of the aggregate globalization model for the whole sample countries.…”

“…These outcomes are in line with the outcomes of both aggregate globalization models for the whole sample and developed countries' cases. This reveals that macroeconomic situations play an important role in deciding all types of activities of the nations (Kapurubandara & Lawson, 2006;Nadeem et al, 2020). Thus, unstable economic conditions discourage the advancement of ICT in developing countries.…”

Socio‐emotional Wealth Preservation and Alliance Success in Family Firms: The Role of Political Instability and Alliance Management Capability

“…Yet the extant research shows that this learning (e.g. via R&D activities and technology-market knowledge transfer) is typically less efficient in regions characterized as politically unstable (Allard et al, 2012;Liao and Yu, 2012;Nadeem et al, 2020). This is because PI is likely to result in a deficiency of information (Todeva and Knoke, 2005), uncertainty and mistrust in the integrity of rules and regulations, and a lack of reliability of market knowledge (Delios and Henisz, 2003).…”