Articles
DOI DOI: 10.62441/actainnovations.v59i.529

Cultural determinants of national innovative capacity: A cross-country analysis of developed and developing countries

Abstract

This article investigates the impact of Hofstede’s cultural dimensions on the innovative capacity of countries by comparing developed and developing countries during the period 2009–2024, using an unbalanced panel dataset of 83 countries and a random-effects model with Driscoll–Kraay standard. The results reveal that cultures contexts characterized by high power distance, strong uncertainty avoidance, collectivism, femininity, short-term orientation, and restraint tend to suppress national innovative capacity, whereas low power distance, individualism, low uncertainty avoidance, masculinity, long-term orientation, and indulgence contribute to its enhancement. Moreover, whereas uncertainty avoidance exerts a more pronounced negative impact in developing countries, masculinity and indulgence exhibit comparatively stronger positive impacts on the innovative capacity of developed countries. These findings highlight that cultural dimensions shape cross-country differences in innovative capacity and that economic development level moderates the strength of these relationships.

How to Cite

Vu, T. N. Q., Nguyen, Q. C., PHAN, T. T., Nguyen, T. V., & Kieu, Q. H. (2026). Cultural determinants of national innovative capacity: A cross-country analysis of developed and developing countries. ACTA INNOVATIONS, 59, 115–131. https://doi.org/10.62441/actainnovations.v59i.529

References

  1. Andrijauskiene, M., & Dumčiuvienė, D. (2019). Inward Foreign Direct Investment and National Innovative Capacity. Engineering Economics, 30(3), 339–348. https://doi.org/10.5755/j01.ee.30.3.22832
  2. Bonetto, E., Pichot, N., & Adam-Troïan, J. (2022). The Role of Cultural Values in National-Level Innovation: Evidence from 106 Countries. Cross-Cultural Research, 56(4), 307–322. https://doi.org/10.1177/10693971221078087
  3. Bukowski, A., & Rudnicki, S. (2019). Not Only Individualism: The Effects of Long-Term Orientation and Other Cultural Variables on National Innovation Success. Cross-Cultural Research, 53(2), 119–162. https://doi.org/10.1177/1069397118785546
  4. Chengying, H., Wang, T., Shah, S. A., Chang, Y., & Zhou, X. (2023). A study on the moderating role of national absorptive capacity between institutional quality and FDI inflow: evidence from developing countries. Economic Research-Ekonomska Istraživanja, 36(1), 2177–2198. https://doi.org/10.1080/1331677X.2022.2096659
  5. Dougherty, C. (2011). Introduction to econometrics. Oxford University Press; 4th edition.
  6. Driscoll, J. C., & Kraay, A. C. (1998). Consistent covariance matrix estimation with spatially dependent panel data. Review of Economics and Statistics, 80(4), 549–559. https://doi.org/10.1162/003465398557825
  7. Duarte, M. P., & Carvalho, F. M. P. O. (2024). Does culture moderate the innovation input–output relationship? A two-stage configurational analysis. Cross Cultural and Strategic Management, 31(2), 181–204. https://doi.org/10.1108/CCSM-07-2023-0125
  8. Efrat, K. (2014). The direct and indirect impact of culture on innovation. Technovation, 34(1), 12–20. https://doi.org/10.1016/j.technovation.2013.08.003
  9. Erez, M., & Nouri, R. (2010). Creativity: the influence of cultural, social, and work contexts. Management and Organization Review, 6(3), 351–370. https://doi.org/10.1111/j.1740-8784.2010.00191.x
  10. Espig, A., Mazzini, I. T., Zimmermann, C., & de Carvalho, L. C. (2022). National culture and innovation: a multidimensional analysis. Innovation & Management Review, 19(4), 322–338. https://doi.org/10.1108/INMR-09-2020-0121
  11. Furman, J. L., Porter, M. E., & Stern, S. (2002). The determinants of national innovative capacity. Research Policy, 31(6), 899–933. https://doi.org/10.1016/S0048-7333(01)00152-4
  12. Gorodnichenko, Y., & Roland, G. (2017). Culture, Institutions, and the Wealth of Nations. The Review of Economics and Statistics, 99(3), 402–416. https://doi.org/10.1162/REST_a_00599
  13. Gould, W. (2022). What is the between estimator? Stata. https://www.stata.com/support/faqs/statistics/between-estimator/. Accessed 12 Apr. 2023.
  14. Greene, W. H. (2012). Econometric Analysis (7th Ed). Pearson Education, Inc.
  15. Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2014). Multivariate Data Analysis (7th ed.). Pearson.
  16. Halkos, G. E., & Tzeremes, N. G. (2013). Modelling the effect of national culture on countries’ innovation performances: A conditional full frontier approach. International Review of Applied Economics, 27(5), 656–678. https://doi.org/10.1080/02692171.2013.778819
  17. Hofstede, G. (1980). Culture’s consequences: International differences in work-related values. Beverly Hills, CA: Sage.
  18. Hofstede, G., & Bond, M. H. (1988). The Confucius connection: From cultural roots to economic growth. Organizational Dynamics, 16(4), 5–21. https://doi.org/10.1016/0090-2616(88)90009-5
  19. Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind: Intercultural Cooperation and Its Importance for Survival (3rd ed.). McGraw Hill.
  20. Johnson, W. H. A. (2022). Shades of gray: Understanding the ethics of society’s technology and innovation propensities using national culture. Prometheus: Critical Studies in Innovation, 38(2), 194–206. https://doi.org/10.13169/prometheus.38.2.0194
  21. Kaasa, A., & Vadi, M. (2010). How does culture contribute to innovation? Evidence from European countries. Economics of Innovation and New Technology, 19(7), 583–604. https://doi.org/10.1080/10438590902987222
  22. Khan, A., Khan, T., & Ahmad, M. (2025). The role of technological innovation in sustainable growth : Exploring the economic impact of green innovation and renewable energy. Environmental Challenges, 18(November 2024), 101109. https://doi.org/10.1016/j.envc.2025.101109
  23. Khan, R., & Cox, P. (2017). Country Culture and National Innovation. Archives of Business Research, 5(2), 85–101. https://doi.org/10.14738/abr.52.2768
  24. Koç, Ş., Uctu, R., Essop, H., & Mercan, B. (2026). The impact of innovation on economic growth : A dynamic panel data analysis using system GMM approach. International Journal of Innovation Studies, 10(1), 20–30. https://doi.org/10.1016/j.ijis.2025.09.003
  25. Lee, H. S., Chernikov, S. U., Nagy, S., & Degtereva, E. A. (2022). The Impact of National Culture on Innovation: A Comparative Analysis between Developed and Developing Nations during the Pre-and Post-Crisis Period 2007–2021. Social Sciences, 11(11). https://doi.org/10.3390/socsci11110522
  26. López-Cabarcos, M. Á., Piñeiro-Chousa, J., & Quiñoá-Piñeiro, L. (2021). An approach to a country’s innovation considering cultural, economic, and social conditions. Economic Research-Ekonomska Istrazivanja , 34(1), 2747–2766. https://doi.org/10.1080/1331677X.2020.1838314
  27. Lourenço, C. M., & Santos, F. C. A. (2023). Prediction of the innovative capacity of countries based on their cultural dimensions: an analysis of the global innovation index. Acta Scientiarum. Technology, 45, e62018. https://doi.org/10.4025/actascitechnol.v45i1.62018
  28. Lundvall, B.-åke, Johnson, B., Andersen, E. S., & Dalum, B. (2002). National systems of production, innovation and competence building. Research Policy, 31(2), 213–231. https://doi.org/10.1016/S0048-7333(01)00137-8
  29. Nelson, R. R. (2007). Institutions and Economic Growth: Sharpening the Research Agenda. Journal of Economic Issues, 41(2), 313–323. https://doi.org/10.1080/00213624.2007.11507018
  30. OECD/Eurostat. (2005). Oslo Manual: Guidelines for Collecting, Reporting and Using Data on Innovation (3th ed.). The Measurement of Scientific and Technological Activities, OECD Publishing, Paris. https://doi.org/10.1787/9789264013100-en
  31. Prim, A. L., Filho, L. S., Zamur, G. A. C., & Di Serio, L. C. (2017). The Relationship Between National Culture Dimensions And Degree Of Innovation. International Journal of Innovation Management, 21(1). https://doi.org/10.1142/S136391961730001X
  32. Rinne, T., Steel, G. D., & Fairweather, J. (2012). Hofstede and Shane Revisited: The Role of Power Distance and Individualism in National-Level Innovation Success. Cross-Cultural Research, 46(2), 91–108. https://doi.org/10.1177/1069397111423898
  33. Schumpeter, J. A. (1934). The Theory of Economic Development: An Inquiry Into Profits, Capital, Credit, Interest, and the Business Cycle. Harvard University Press.
  34. Shane, S. (1993). Cultural influences on national rates of innovation. Journal of Business Venturing, 8(1), 59–73. https://doi.org/10.1016/0883-9026(93)90011-S
  35. Standing, C., Mavi, R. K., Suseno, Y., & Jackson, P. (2018). Does Openness Improve National Innovation? An Application to OECD Countries. Systems Research and Behavioral Science, 35(6), 619–631. https://doi.org/10.1002/sres.2506
  36. Tekic, A., & Tekic, Z. (2021). Culture as antecedent of national innovation performance: Evidence from neo-configurational perspective. Journal of Business Research, 125(December 2020), 385–396. https://doi.org/10.1016/j.jbusres.2020.12.014
  37. The Culture Factor Group. (2024). Country comparison tool. The Culture Factor Group. https://theculturefactor.com/country-comparison-tool
  38. Tsegaye, W., Su, Q., & Malik, M. (2019). The Antecedent Impact of Culture and Economic Growth on Nations` Creativity and Innovation Capability. Creativity Research Journal, 31(2), 215–222. https://doi.org/10.1080/10400419.2019.1606621
  39. WIPO. (2024). Global Innovation Index 2007 - 2024. World Intellectual Property Organization. https://www.wipo.int/global_innovation_index/en/
  40. World Bank. (2023). DataBank: World Development Indicators. World Bank. https://databank.worldbank.org/source/world-development-indicators
  41. Yeganeh, H. (2023). Culture and innovation: a human emancipation perspective. International Journal of Sociology and Social Policy, 43(11–12), 980–1007. https://doi.org/10.1108/IJSSP-07-2022-0185