Transformations  in
Business & Economics

THE INSTITUTIONAL FRAMEWORK AND INNOVATION LEVELS IN EU COUNTRIES
Nicoleta Ramona Bunda, Elena Cerasela Spatariu, Norina Popovici

ABSTRACT.While innovations are crucial for the economic growth and development, factors that determine its levels have yet to be examined. This paper tries to fill this void starting by framing the research on the relationship between institutions and innovations. The main objective of this paper is to depict through the empirical research the correlation between social, economic, and political institutions, on the one hand, and national level of innovation, on the other hand. The quality of institutions is measured using the index of institutionalized social technologies with its two main sub-indices, namely, Risk reducing technologies and Anti Rent seeking technologies. The national level of innovation is measured by expenditure on R&D as an input/catalyst of the whole innovation process. Finally, analytical findings are reported with the accompanying discussion. This paper, using data from the 28EU countries between 1993 and 2012, concludes that institutions matter for the national levels of innovation.

KEYWORDS: : institutionalized social technologies, R&D expenditure, EU countries, new institutional economics.

JEL classification: B52, O39, O43.