The effect of national culture on countries’ innovation efficiency

This paper contributes to the link between social and cultural factors with countries innovation performance. By measuring 25 countries’ innovation efficiency with the use of conditional and unconditional DEA (Data Envelopment Analysis) frontiers the paper provides empirical evidence of the effect of culture on countries’ innovation efficiency. Particularly, conditional and unconditional full frontier models are used alongside with bootstrap techniques in order to determine the effect of national culture on countries’ innovation performance. The study illustrates how the recent developments in efficiency analysis and statistical inference can be applied when evaluating such issues. The results reveal that national culture has an impact on countries’ innovation efficiency. Analytically, the results indicate that higher PDI (power distance index), IDV (individualism) and UAI (uncertainty avoidance) values have a negative effect on countries innovation efficiency, whereas masculinity values appear to have a positive effect on countries innovation performance.