Unable to innovate or just bad circumstances? Comparing the innovation system of a state-led and market-based economy

Ann Hipp, Udo Ludwig and Jutta Günther

No 2111, Bremen Papers on Economics & Innovation from University of Bremen, Faculty of Business Studies and Economics

Abstract: State socialism failed due to its inner contradictions. Despite huge investments in R&D-intensive industries, the soviet-type economy collapsed in 1989 in Eastern Germany, and the market-based system in the Western part prevailed. We compare the two parallel existing innovation systems in Germany to shed light on the success and failure of the state-led innovation system. Based on newly created indicators from archive data we show in a natural experiment setting that modernization efforts in relation to GDP was much bigger in the socialist as compared to the market economy in the last decades.These achievements, however, could not fully unfold in favor of economic growth due to obstacles related to the setting of research priorities, innovation incentives, and knowledge flow.

Keywords: Comparative economic systems; natural experiment; innovation system; Germany (search for similar items in EconPapers)
JEL-codes: N94 O11 O31 (search for similar items in EconPapers)
Pages: 26 pages
Date: 2021-12
New Economics Papers: this item is included in nep-his, nep-ino, nep-knm and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://media.suub.uni-bremen.de/bitstream/elib/56 ... %20to%20innovate.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:atv:wpaper:2111

DOI: 10.26092/elib/1330

Access Statistics for this paper

More papers in Bremen Papers on Economics & Innovation from University of Bremen, Faculty of Business Studies and Economics Contact information at EDIRC.
Bibliographic data for series maintained by Matheus Eduardo Leusin ().