The Impact of National Culture on Innovation: A Comparative Analysis between Developed and Developing Nations during the Pre- and Post-Crisis Period 2007–2021

Round 1

Reviewer 1 Report

Good to see the good research work, anyway, there are a few suggestions that can improve your work. 

The author should include one or two sentences in the abstract about the purpose of the study (the main motivation of the study which is related to the problem statement of the study).

Furthermore, the author must improve the introduction in respect of practical, theoretical, and methodological gaps. 

Please includes the implications of the study in terms of practical theoretical and methodological implications. Furthermore, the author should discuss the limitations and future recommendations of the study as well. 

Author Response

Dear, Dr. 

We highly appreciate your valuable comments for the improvement of our research. 

Comment 1) The author should include one or two sentences in the abstract about the purpose of the study (the main motivation of the study which is related to the problem statement of the study).

Answer 1) The abstract has been modified (colored by the yellow) as follows:

Abstract. This empirical study investigates the impact of the Hofstede cultural dimensions (HCD) on the global innovation index (GII) scores in four different years (2007, 2009, 2019 and 2021) to compare the impacts during pre- and post-crisis (financial and COVID-19) period by employing ordinary least square (OLS) and robust least square (Robust) analyses. The purpose of this study is to identify the impact of cultural factors on the innovation development for different income groups during pre- and post-crisis period. We found that, in general, the same cultural properties have been required for countries to enhance innovation inputs and outputs regardless of pre- and post-crisis periods and time variances. The significant cultural factors (driving forces) of the in-novation performance are not changing over time. However, our empirical results revealed that not the crisis itself but the income group (either developed or developing) is the factor to influence on the relationship between cultural properties and innovation. It is also worth noting that cultural properties have lost much of their impact on innovation, particularly, in developing countries, during recent periods. It is highly likely that in terms of innovation no cultural development or change can significantly impact the innovation output of developing countries without the construction of the appropriate systems.

Comment 2) Furthermore, the author must improve the introduction in respect of practical, theoretical, and methodological gaps.

Answer 2) The introduction has been modified (colored by the yellow) as follows:

Innovation plays an important role in promoting economic progress and competi-tiveness - in both developed and developing countries (Şener and Sarıdoğan, 2011). Many governments place innovation at the heart of their growth strategies (Patanakul and Pinto, 2014). Nowadays innovation encompass social, business and technical in-novations (Dawson and Daniel, 2010). Innovation in emerging economies is crucial to inspire people, which is especially true for the next generation of entrepreneurs and innovators (Reddy, 2011).

Culture is a vital basis for innovation (Kaasa and Vadi, 2008), and has a significant positive impact on it (Laznak (2011); Rinne et al. (2012); Taylor and Wilson (2012); An-drijauskiene and Dumciuviene (2017); Prim et al. (2017); Khan and Cox, 2017; Yun et al. (20178); Handoyo (2018) Bukowski and Rudnicki (2019); Tekic and Tekic (2021); Espig et al., 2021). There are several studies exploring how culture affect innovation (Sun, 2009), however, the evolution of cultural dimensions that influence countries' innovation performance over time and the impact of the crisis on them have not yet been studied.

Theoretically, in general, some specific cultural features are continuously mani-fested as desirable for innovation development (See Table 2). However, during a crisis, society should be tightly cooperated under a strong leadership to efficiently respond to sudden changes and be quickly normalized from it. Thereby, we will identify whether different cultural properties are required for innovation development during pre- and post-crisis periods. In addition, the impact of cultural factors can be variant depending on the income level of a country, which is highly correlated with the level of innovation system. The aim of this paper is to explore the relationships between Hofstede’s cultural dimensions and the innovation performance of developing and developed countries before, during and after crisis represented by the outbreak of Covid-19 pandemic. In this study we also address the existing research gap by responding to the research question concerning on the evolution of the cultural dimensions affecting innovation performance over time. In terms of methodology, this study adopted multiple regression to measure the impact of cultural factors on innovation development based on mathematical accuracy. In particular, alongside ordinary least square (OLS) estimation, we further used robust least square (the least median of squares method) to better deal with outliers.

The remaining parts of the paper are composed of as follows. Section 2 is dedicated to literature review on Hofstede’s 6D model and the Global Innovation Index (GII), and hypothesis development. Section 3 describes data and methodology. Section 4 presents results and discussions. Section 5 includes conclusions and policy implications.

Comment 3) Please includes the implications of the study in terms of practical theoretical and methodological implications. Furthermore, the author should discuss the limitations and future recommendations of the study as well.

Answer 3) The conclusion has been modified (colored by the yellow) as follows:

This study investigates the impact of the Hofstede cultural dimensions (HCD) on the global innovation index (GII) scores in four different years (2007, 2009, 2019 and 2021) to compare the impacts during pre- and post-crisis (financial and COVID-19) pe-riod. Our study showed several interesting patterns that can be interpreted in several ways. We can see that most of our hypothesis were rejected by the results, except for the H4. The more generic conclusions point out that culture, although being an important component of innovative output of the country, does not have a serious impact on the GII results. It can be elaborated that properties of IDV and PDI are often associated with countries that have access to slightly more financial, human and educative resources and thus the price of a mistake (meaning “spending on fruitless innovations”) are lower than in poorer regions. Therefore, the social and governmental structure there provide less barriers on the way of innovators, thus in long-term leading to higher innovation output measured by GII. However, this hypothesis requires additional research and analysis.

The far more straightforward explanation of the analysis outcome is that modern innovation systems require a large amount of infrastructural, legal, educative and financial investment from the government. Once these investments are made, the impact of culture properties becomes secondary to the availability of venture and governmental funding, educative and laboratory facilities, copyright protection etc. Therefore, while cultural properties can theoretically impact the amount of innovators in the constructed innovation systems, the systemic output measured by GII would not be drastically impacted by them. Theoretically, this implies that desirable cultural properties for innovation development are same regardless of crisis.

Finally, the more specific analysis outcome would be the absence of crisis impact on cultural impact in the study. This can clearly be attributed to the fact of stable or even increased funding of the appropriate innovation systems by developed countries over the last 15 years. It is also important to remember that since 2009 crisis the USA, Japan and EU states have launched extensive “Quantitative easing” programs, that allowed to flood the economies with low-cost credit and therefore provide monetary support for venture capitals funding innovation systems. At the same time, while the developed countries continue to support their prolonged investments in their innovation systems, the developing countries could not allocate such resources for this cause. Thus, the results in GII of most developing states remained more or less low, with even less fund allocation during the COVID-19 pandemic. It is highly likely that in terms of innovation no cultural development or change can significantly impact the innovation output of developing countries without the construction of the appropriate systems. Theoretically, the results confirmed a significance of the income level on innovation development. Practically, the results imply that the developing countries’ governments should sophisticate an innovation system to the certain level as the first priority for innovation development. 

On the other hand, we acknowledge that this study has potential limitations. The number of countries included in the model is rather small due to constrained datasets of Hofstede’s cultural dimensions and GII overtime, which can cause a sample bias. The future studies on the impact of cultural factors on innovation development can be made based on expanded sample countries. In addition, we used the total value of GII to evaluate the overall impact of culture on innovation. However, GII is composed of a complex of various sub-indicators. Thereby, the follow-up study can be sophisticated, if focusing on impacts on a specific sub-indicator of GII.

Reviewer 2 Report

There was no need to add further comments and suggestions for approvements (neither in contents nor in style/grammar etc) since the paper is really fine and well argued. In my opinion it is ready to be published without real amendments. It updates the present debate on this subject and can then compete with the current academic literature in this important field.

Author Response

Dear, Dr. 

We highly appreciate your favorable evaluation on our research! Thank you once again.