Effects of Culture on Innovation in European Countries

Abstract

Innovation is vital for the growth and success of nations in a globalized economy. Researchers have just begun to understand the complex interactions between culture and innovation, and the conflicting results obtained by literature highlight the need to further examine this relationship. This thesis examines the effect of culture on national innovation performances in Europe, addressing part of the limitations of previous research. A composite indicator, the Summary Innovation Index (SII), is proposed to better measure national innovation performances; furthermore, culture is considered to be a complex construct, thus Hofstede’s model is included in its integrity. Multiple correlation analysis was applied. The findings suggest that indulgence and long-term orientation, dimensions often neglected by literature, are positive and strong cultural predictors of national innovation performances in Europe. The negative effect of power distance on innovation is only partially supported while neither masculinity nor femininity seem to have a significant effect on innovation at the national level; the role of other cultural dimensions finds little or no empirical support.