Connecting the dots between democracy and innovation: The role of pro-market institutions and information processing

TY - JOUR

T1 - Connecting the dots between democracy and innovation

T2 - The role of pro-market institutions and information processing

AU - Yoon, Hyungseok (David)

AU - Boudreaux, Christopher

AU - Kim, Namil

N1 - Publisher Copyright: © 2024 Elsevier B.V.

PY - 2024/10

Y1 - 2024/10

N2 - Prior studies examining the democracy-innovation relationship have reported mixed results. To resolve this tension, our framework grounded in information processing and institutional theory proposes two mechanisms through which democracy influences innovation—pro-market institutions and information processing. Our analysis reveals that democracy indirectly affects innovation primarily through information processing rather than pro-market institutions. While gradually or increasingly democratizing states tend to focus on adopting pro-market systems without considering information freedom (e.g., lifting censorship), our results underscore the importance of information processing for strengthening the democracy-innovation relationship. Our study extends the literature on national innovation rates by shedding light on the information processing implications of democratic institutions.

AB - Prior studies examining the democracy-innovation relationship have reported mixed results. To resolve this tension, our framework grounded in information processing and institutional theory proposes two mechanisms through which democracy influences innovation—pro-market institutions and information processing. Our analysis reveals that democracy indirectly affects innovation primarily through information processing rather than pro-market institutions. While gradually or increasingly democratizing states tend to focus on adopting pro-market systems without considering information freedom (e.g., lifting censorship), our results underscore the importance of information processing for strengthening the democracy-innovation relationship. Our study extends the literature on national innovation rates by shedding light on the information processing implications of democratic institutions.

KW - Democracy

KW - Information processing

KW - Innovation

KW - Pro-market institutions

UR - http://www.scopus.com/inward/record.url?scp=85197338457&partnerID=8YFLogxK

U2 - 10.1016/j.respol.2024.105057

DO - 10.1016/j.respol.2024.105057

M3 - Article

AN - SCOPUS:85197338457

SN - 0048-7333

VL - 53

JO - Research policy

JF - Research policy

IS - 8

M1 - 105057

ER -