Macroeconomic Volatility,Institutional Instability and the Incentive to Innovate |
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Authors: | Serena Masino |
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Affiliation: | Oxford Department of International Development, University of Oxford, Oxford, UK |
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Abstract: | This study investigates the channels through which macroeconomic and institutional instability hinders innovative investment undertakings financed by the domestic private sector. The analysis is based on a sample of 44 countries and considers various instability dimensions. The results suggest a negative impact of real, monetary and political instability on the aggregate level of R&D financed by the business sector. Thus, highlighting the importance of stable macro‐institutional environments in preventing avoidance or abandonment of private innovation undertakings. |
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