Innovative performance effects of institutional quality: an empirical investigation from the Triad

Luigi Aldieri, Cristian Barra, Nazzareno Ruggiero and Concetto Paolo Vinci

Applied Economics, 2020, vol. 52, issue 50, 5464-5476

Abstract: Using data for a set of 823 R&D-intense manufacturing firms within the Triad and the Quality of Government (QoG) dataset over the 2002–2010 period, this article investigates the effects of institutional quality upon firms’ inefficiency, through the application of a Stochastic Frontier Approach (SFA). Empirical evidence, which is robust to alternative specifications of the technology employed and different lag structures in R&D activities, reveals that improvements in the quality of institutions significantly reduce firms’ inefficiency and suggests that, among the set of relevant institutional factors considered, a pre-eminent role is found for the rule of law.

Date: 2020
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DOI: 10.1080/00036846.2020.1764483

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