On the Relationship between Informal and Formal Institutions, Foreign Direct Investment, and Innovation in Emerging Markets: The Case of Russia, India, and China, 1990-2014

Natalya Smith*, Katerina Thomas

*Corresponding author for this work

Research output: Contribution to Book/ReportChapterpeer-review

Abstract

This chapter examines innovation in socio-institutional environments of three largest and most diverse emerging markets: Russia, India and China over the period 1990-2014. It considers formal (proxied by corruption) and informal (proxied by trust) institutions and non-linear forces. It also examines the role of Foreign Direct Investment (FDI) in (the likelihood of) fostering innovation and of two research and development (R&D) inputs: R&D expenditures and personnel. A significantly positive direct effect of trust and a negative direct effect of corruption are confirmed, whilst there is a significant non-linear decreasing relationship with trust and increasing relationship with corruption. Interestingly, FDI and R&D expenditures are found to decrease innovation, whilst R&D personnel increase innovation output across the sample.
Original languageEnglish
Title of host publicationMultinational Enterprise Management Strategies in Developing Countries
EditorsMohammad Ayub Khan
PublisherIGI Global
Chapter9
Pages176-197
Number of pages22
ISBN (Electronic)9781522502777
ISBN (Print)9781522502760
DOIs
Publication statusPublished - 1 Jan 2016

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