Academic journal article Management Revue

Innovation, Institutions and Cultures: Exploring the European Context **

Academic journal article Management Revue

Innovation, Institutions and Cultures: Exploring the European Context **

Article excerpt

1. Introduction

Innovative behavior of firms is powered by a number of conditions that do not relate exclusively to internal resources or owned by them but are grounded in the socioeconomic and cultural environment in which these firms operate. In particular, innovation is likely to be affected by national cultures (Hofstede, 1980; Shane, 1993; Hussler, 2004). The existing research on innovation that had an international focus has primarily focused on different corporate and professional cultures (Ulijn, Nagel, & Tan, 2001; Pivoda, 2001), as well as organisational culture (Feldman, 1988) while generally overlooking the importance of national culture as a means to explain and predict innovation performance in a global context (Herbig & Dunphy, 1998). Although it appears that no real substantial effort has been made to study whether innovation is, or should be, managed differently in different national cultures (Hofstede, 1980; Shane, 1993; Hussler, 2004; Authors, 2009) we believe that national culture is equally a relevant lens through which the systematic comparison of similarities and differences would considerably improve our understanding of the innovation performance of European firms. Drawing on our existing work on innovation (Crowe, Vecchi, Brennan, & Coughlan, 2007; Vecchi & Brennan, 2009a, 2009b; Vecchi, Della Piaña, & Cacia, 2013), by adopting a cross-cultural perspective (Della Piaña & Vivacqua, 2012; Capaldo, Della Piaña & Vecchi, 2012a; Vecchi et al., 2013) and by endorsing an institutionbased view in this paper we present an important yet understudied field in crosscultural management - the innovation performance of firms across European countries. In a recent review of cross-cultural management studies over the last five decades (Capaldo, Della Piaña, Monteleone, & Sergi, 2012b), it emerges that Innovation Management, as a subject area still remains understudied. Overall, given the relevance of cultural contexts that provide an understanding of firms 'innovation performance, it is important to highlight how different institutional settings affect innovation at firm level, which is critical to detect the local innovation dynamics. The regional systems of innovation approach has heavily influenced policy makers in many parts of the world, both in terms of providing clues as to why innovation occurs and varies so significantly across countries and also in terms of identifying adequate policy responses (McCann & Ortega-Argilés, 2013). To date, though, comparative management research only marginally addresses the issue of the interface between firms and innovation across the different institutional settings and the cultural contexts of the European countries. As such, there is an opportunity to conduct valuable research. Drawing on our existing work on innovation (Crowe et al., 2007; Vecchi & Brennan, 2009a, 2009b; Vecchi et ah, 2013) by taking a cross-cultural perspective (Della Piaña & Vivacqua, 2012; Capaldo et ah, 2012a; Vecchi et ah, 2013) and by endorsing an institution-based view (Peng & Pleggenkuhle-Miles, 2009; Luo, Sun, & Wang Lu, 2011) in this paper we seek to assess the innovation performance of firms across sixteen European countries. The aim of this explorative study is to compare from a cross-cultural perspective the innovation performance of firms across sixteen European countries (Austria, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Poland, Portugal, Slovenia, Spain, Sweden, The Netherlands, the UK) in order to identify their distinctive local innovation dynamics. To this end, this study focuses on the ca- pabilities of these sixteen countries to transform their inputs (Innovation Input SubIndex namely Institutions, Human Capital & Research, Infrastructure, Market Sophistication and Business Sophistication) into outputs (Innovation Output Sub-Index namely Knowledge & Technology Outputs as well as Creative Outputs), the Efficiency Ratio as they have been identified by the most recent iteration of the Global Innovation Index Report (2013). …

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