The influence of culture and transparency on global research and development intensity: an overview across Europe

(1)

ContaduríayAdministración62(2017)1408–1422

www.contaduriayadministracionunam.mx/ www.cya.unam.mx/index.php/cya

The

influence

of

culture

and

transparency

on

global

research

and

development

intensity:

An

overview

across

Europe

La

inﬂuencia

de

la

cultura

y

transparencia

en

la

intensidad

global

de

investigación

y

desarrollo:

una

visión

general

en

Europa

Ilídio

Tomás

Lopes

∗

,

Rogério

Marques

Serrasqueiro

InstitutoUniversitáriodeLisboa,BusinessResearchUnit,Portugal

Received8June2016;accepted2December2016 Availableonline5July2017

Abstract

Cultureandtransparencycanbedescribedasasetofbeliefs,norms,andactions,whichdrivethehuman actionintoinnovativeness.Overthecenturies,thosepillarshavedrivenindividuals,groups,organizations, andnations,intothemostcomplexnetworkingschemes.Itseemsnowunquestionablethatthosebeliefsand policies,affectbothprivateandpublicorganizations,drivingthemacrossinnovationwagesinamore incre-mentalorradicalway.Thedependentvariableinthisresearch(R&D)embodiesthedisbursementsinresearch anddevelopment,carriedoutbybusinessenterpriseandpublicsector,andbyeducationinstitutions.Thus, thisresearchaimstomainlyexploretheeffectofcultureandtransparency,asdriversofbusiness attractive-ness,onglobalR&Dintensity.Usinginformationfrom31Europeancountriesovertheperiod2010–2014, totalR&DexpenditureswereregressedagainstseveralvariablessuchastheHofstede’sculturaldimensions, thepublicsectortransparencyindex,andotheraggregatedvariables.Mostofthetheoreticalassumptions arenowsupportedbyourempiricaloutcomes.Cultureandtransparencycanactasattractivenessdrivers,

∗_{Corresponding}_author.

E-mailaddress:[email protected](I.T.Lopes).

PeerReviewundertheresponsibilityofUniversidadNacionalAutónomadeMéxico.

http://dx.doi.org/10.1016/j.cya.2017.06.002

(2)

forbusinesssectororganizationsandforotherprivateandpublicinstitutions,towardtheimplementationof knowledgetransformationmechanismsandintellectualcapitalachievements.

JELclassiﬁcation: M21;M40

Keywords: Knowledge;Innovation;Researchanddevelopment;Culture;Transparency;Europe

Resumen

Laculturaylatransparenciasepuedendescribircomounconjuntodecreencias,normasyaccionesque impulsanlaacciónhumanaensucapacidaddeinnovación.Enlosúltimossiglos,culturaytransparenciahan impulsadolosindividuos,grupos,organizacionesynacionesenlaimplementaciónderedesmáscomplejas. Pareceactualmenteincuestionableque lascreenciasypolíticasafectanalasorganizacionesprivadas y públicas,llevandoaimplementarmecanismosdeinnovacióndeformaradical.Lavariabledependiente(I&D) agrupalosdesembolsoseninvestigaciónydesarrollollevadosacaboporlasempresas,porelsectorpúblicoy porlasinstitucioneseducativas.Porlotanto,lapresenteinvestigacióntienecomoobjetivoprimarioestudiarel efectodelaculturaydelatransparenciaenlaintensidadglobaldeI&D.Utilizandolainformaciónde31países europeosduranteelperíodo2010-2014,eltotaldegastosenI&Dsehacorrelacionadocondiversasvariables, comoporejemplolasdimensionesculturalesdeHofstede,elíndicedetransparenciadelsectorpúblicoy otrasvariablesagregadas.Lamayorpartedelasevidenciasteóricasson,enestainvestigación,soportadas porlosresultadosempíricosdemanerasignificativa.Porlotanto,sololaseconomíasqueestánorientadasa latransformacióndelconocimientoyestáncomprometidasconlaproduccióndecapitalintelectualincluyen ensuestrategiaunafuerteinversióneninvestigaciónydesarrollo.

CódigosJEL: M21;M40

Palabrasclave: Conocimiento;Innovación;Investigaciónydesarrollo;Cultura;Transparencia;Europa

Introductionandresearchobjective

InnovationderivesfromtheLatininnovatioandembodiesanactionorprocessofinnovating. Itisassociatedtochanges,withacertainlevelofnovelty,byintroducingnewmethods,ideas,or products.Ittranslatestheabilitytoproduceknowledge,itcontributestopotentialinflows,andit iswidelyrecognizedasoneoftheprimarydrivingforcesofgrowthandprofitability.Overthelast decades,researcherstriedtoidentifythesourcesthatdriveindividualsandorganizationsto inno-vateandcontributetovaluecreationandsustainabledevelopmentacrossfirmsandnations(Chen, Hu,&Yang,2011;Deschryvere,2014;Fontana,Nuvolary,Shimizy,&Vezzulli,2012;Jewkes, Sawers,&Stillerman,1958;Malerba&Orsenigo,1995,Malerba&Orsenigo,1996;Pavitt,1984; VanderPal,2015).Inthesedifferentapproachestowardtheidentificationofinnovationdrivers, Schumpeterianpatternshavebeenstatedasthemostrobustfindingsacrosstheliterature.Thus, innovativeactivitiesdifferacrossindustriesalongseveraldimensions,inparticulartheknowledge intensityembeddedinthoseactivities,thetypeofactorsandinstitutionsinvolvedininnovative activitiesandinnovationpolicies,andtheeconomiceffects ofinnovations(Fernández-Jardón, Costa,&Dorregio,2014;Malerba,2005).Thosepatternsarestructuredaroundfourdimensions: 1,concentrationandasymmetriesamonginnovatingfirmsineachparticularsector;2,sizeofthe innovatingfirms;3,changesovertimeinthehierarchyofinnovators;4,relevanceoftheentry

(3)

ofnewinnovators.Fontanaetal.(2012)explorethemostrecentliteratureaboutSchumpeterian patternsofinnovationandcontributetoidentifythesourcesofbreakthroughinventionsby extract-ingnewoutcomesonthebaseofthementionedoldpatterns.Broadly,aturbulentenvironment ratherthanamorestableisconducivetoahigherprobabilityoftheoccurrenceofbreakthrough inventions.

ResearchandDevelopment(R&D)isprobablythemostknownandusedproxytomeasurethe innovationintensityacrossentitiesandnations.AccordingtoInternationalAccounting38(IFRF, 2004),“Research”relatestotheoriginalandplannedinvestigationundertakenwiththeprospect ofgainingnewscientificortechnicalknowledgeandunderstandingwhile“Development”isthe application ofresearchfindingsor otherknowledgetoaplanor design,forthe productionof neworsubstantiallyimprovedmaterials,devices,products,processes,systems,orservicesprior tocommencementofcommercialproductionor use.Thus,R&Dexpenditurescouldlead enti-ties(publicandprivate)intogrowth,intoincreasedreturns,andintosubsequentlyfinancialand strategicachievements.Theseknowledgebasedexpendituresarethebasisofinnovation,driving companiestopotentialeconomicbenefits(Fernández-Jardónetal.,2014;Tahinakis&Samarinas, 2013;VanderPal,2015).AccordingtoChenetal.(2011),mostnationshavegraduallydevoted moreeffortsonR&D,andhavetriedtocreateafavorableinnovationenvironmentbyenforcing intellectual propertyrights topromoteinnovations.At amicroeconomiclevel, literature does notprovideunanimousevidenceabouttherelationshipbetweeninnovationandturnover(Chan, Lokoniskok,&Sougiannis,2003;Deschryvere,2014;Lev&Sougiannis,1996;VanderPal,2015). Deschryvere(2014)foundthatlargefirmsthatarecontinuousinnovatorshavesignificant posi-tivetwo-wayassociationsbetweenR&Dgrowthandsalesgrowth;however,insmallcontinuous productinnovatorsthatassociationisclearlystrongerthanforlargeones.Furthermore,relating theoccasional processandproductinnovators, hefoundapositiveandsignificant association betweensalesgrowthandsubsequentR&Dgrowth.However,Chanetal.(2003)donotsupport adirect relationshipbetweenR&Dexpenditures andfuturereturns, inthescope of thestock market valuation derivedfrom R&D expenditures.Different evidenceswere obtained byLev andSougiannis(1996)relatinginsidergains.ThesegainsinR&Dinsideintensivecompaniesare significantlyhigherthaninsidergainsobtainedinfirmsnotstronglyengagedininnovation expend-itures.AlthoughthecomplexrelationshipsbetweenR&Dandsubsequenteconomicbenefits,if efficientlyandproductivelyused,R&D canserveasamajorsourceof competitiveadvantage (Chenetal., 2011).AccordingtoAkinwale, Dada,Oluwadare, andJesuleye (2012),itis not enoughtoincreasetheexpendituresonR&Dandinnovationwhencountrieshaveweak institu-tionsandnetworks,andpoorcoordinationsystems.BuildingacreativehighperformanceR&D cultureisrequired.Thiscreativeculturecombinescustomerfocus,risktolerance, entrepreneur-ship,alignment withstrategies,innovation, virtualorganization andnetworking,andefficient execution.BuildingacreativewinningR&Dcultureisembeddedonvalues,expertise,shortand longtermorientation,andeffectivepolicies.Thus,nationalculture,asadriverofattractiveness forindividualsandorganizations,isprobablythemostcriticaldriveroftheaggregated(atamacro andmicroeconomiclevels)innovationeffectiveness,alsoembodiedonmacroeconomicvariables suchasgrossdomesticproduct,onhightechnologytrade,onhumanresourcesinscienceandon technology,venturecapitalinvestments,amongothers(Ambos&Schlegelmilch,2008;Newman, 2009;Skerlavaj,Su,&Huang,2013;Stock,Six,&Zacharias,2013).

Thisresearchaimstoexploretheeffectofcultureandtransparency,asdriversofinnovation attractiveness, onglobalR&D intensity.Although themultiplecontradictoryviews (Blodgett, Bakir,&Rose,2008;Fang,2003;Venaik&Brewer,2013)ontheHofstede’sculturaldimensions (Hofstede,Hofstede,&Minkov,2010),weaimtoevidencewhetherthoseculturedimensionsand

(4)

transparencyinfluencetheR&Dexpendituresintensity(businessenterpriseandpublic disburse-ments) stated out by the European countries.Our preliminary assumption states that culture influences R&D expenditures policies, whichact as subsequent drivers of knowledge assets development,impactingonpotentialeconomicreturns.

Theoreticalbackground

Innovation,cultureandtransparency

Culture is broadly incorporated in the society and economy as an embodiment of ideas, customs,andsocialbehaviorofaparticularpeople,group,nation,orregion.Itisassociatedtothe collectiveprogrammingofmindwhichenablespeopleandsocietytodistinguishthemembers of onegroup or category of people from those of another (Hofstede etal., 2010). It is also linkedtoknowledgeandlearning(Davenport&Prusak,1998;Skerlavajetal.,2013),itisalso associatedtovalues,tonormsandartifacts(Stocketal.,2013).Hence,culturecanbeseenasa setofbeliefsthatdrivesthehumanactiontoinnovativenessand,overthecenturies,havedriven individualsandgroupstothemostcomplexnetworkingsystems.AccordingtoKleinschmidt,De Bretain,andSalomo(2007),corporatecultureofferstocompaniesandcountriestheopportunity to embrace the spiritof innovativeness and become innovative oriented.Stock et al.(2013) foundthatculturalartifactsfullymediatetheeffectsof innovation-orientatedvalueandnorms on innovativeness. Thus, values and norms need to transform into specific artifacts before they can influence innovation outcomes (e.g. intellectual capital, embodied by patents, by newproducts,newprocesses,etc.).Furthermore, thoseauthorsalsorevealedthatacompany’s innovation-oriented culture is less crucial in markets in which customer preferences change dramatically,however prevailingintechnologicallyturbulentenvironments.Theimportanceof culturerisesindynamicmarketsbutdecreasesinmarketswithtechnologicalturbulence.

Linkingthenationalandcorporatelevels,Skerlavajetal.(2013)haveexaminedtheeffectsof cultureonthreekeyelementsinthedevelopmentoforganizationallearning:information acquisi-tion,informationinterpretation,andbehavioralandcognitivechanges.Theysuggestthatnational cultureplaysaninsignificantroleinmoderatingtheflowsofinformationacquisitionand inter-pretation.Indeed,atacorporatelevel,theinformationacquisitionandinterpretationseemstobe associatedtoorganizationalstructures,absorptivecapacityofindividualsandgroups,andnature ofknowledgetobeincorporatedandused.Theseachievementsarecontradictorytotheevidences providedbyAmbosandSchlegelmich(2008)onthescopeofcapabilityexploitinglaboratories. Theselaboratoriesperformsignificantlybetterinculturallyfavorableenvironments.Thus,R&D managersof multinationalcorporationsshouldgivetonationalculture,amoreprominentrole indecidingwheretolocateanoverseasR&Dlaboratory.Hence,allthecontradictoryoutcomes providedbyliteratureshouldbecontextualizedandanalyzedataregionallevel.Itseemsthat tra-ditionalculturalvaluescanactasenablersordetractorstoinnovativebasedactions,andstrategies. Thesepeculiarculturalfactors,includingnationaltransparencyperception,significantlyinfluence thedevelopmentoftheentireinnovationcycle,bothatanationalandcorporatelevel(VanderPal, 2015;Rujirawanich,Addison,&Smallman,2011).

PublicSectorTransparencyIndex(PSTI)embodiesthecorruptionperceptionsworldwide;it is measuredwithascorebetween0 and100, andispublished byTransparencyInternational (TI,2016)onayearlybasis.Asstatedinthelatestreport(TI,2016)“Apoorscoreislikelya signofwidespreadbribery,lackofpunishmentforcorruptionandpublicinstitutionsthatdon’t respondtocitizen’sneeds”.Thus,itaffectsthedevelopment,theintegrationinthesustainable

(5)

networks,theinnovationbasedstrategies,thenationalwelfare,andtheinnovativeattractiveness. Transparencyisassociatedtonationalculture,inparticulartouncertaintyavoidance(Hofstede etal.,2010)becausethisphenomenonaffectsthefunctioningofthestate,andsometimesalso of privateorganizations.Infact,transparency canact as anadditionalpillarwhichaffects the attractiveness of institutions and policy makers. Hence,culture andtransparency, as a setof individual and collectivebeliefs, norms, andactions, or as a collectivemental programming (Hofstedeetal.,2010),areexpectedtochangeveryslowlyovertime,requiringanincremental mindset.Overdecades,mostcountrieshavebeen characterizedandhavebeenorientedbythe samesetofvalues.However,itisunquestionablethattheabovementionedsetofbeliefsaffects nationalandcorporatestrategies,drivingnationsacrossinnovationwagesinamoreincremental orradicalway.

TheHofstede’sculturaldimensions

Oneofthemostknown,andcontroversial,approachesonculturaldifferencesbetweencountries isbasedontheHofstede’sculturalmodel(Hofstede,2001;Hofstedeetal.,2010).Inafirststage,he hasarguedthatthosedifferenceshavefourdimensions:powerdistance,avoidanceofuncertainty, individualismversuscollectivism,andmasculinityversusfemininity.Subsequently,thatmodel hasincorporatedtwofurtherdimensions:long-termversusshort-termorientationandindulgence. Broadly,powerdistanceexpressestheextenttowhichlesspowerfulmembersoforganizations accept thatpower isunequallydistributed(degreeof inequalityinsociety),while uncertainty avoidance embodies the extent to whichpeople feel threatened by ambiguoussituations and createbeliefsandinstitutions bywhichtheytrytoavoidthem.Thefundamentalissueishow societydealswiththefactthatthefuturecannotbeknown.Individualismembodiesthedegree towhich individuals are integratedinto groups. On the otherhand, masculinity refersto the distributionofemotionalrolesbetweenthegenders,whichisanotherfundamentalissueforany society wherearange of solutionsare sought;andlong-term orientationpromotespragmatic virtuesorientedtowardfuturerewards,inparticularthrift,persistence,andadaptingtochange. Finally,indulgencestandsforasocietythatallowsrelativelyfreegratificationofbasicandnatural humandrivesrelatedtoleisure.Restraintindicatesasocietythatsuppressesgratificationofneeds, andregulatesit,bymeansofstrictsocialnorms.

Severalresearcheshavebeencarriedoutoverthelastdecades,basedontheHofstede’scultural dimensions (Blodgettet al.,2008; De Mooij,2013; Kim&Kim,2010; Minkov&Hofstede, 2011;Tang&Koveos,2008;Venaik&Brewer,2013).However,thedoctrineembeddedbythose culturaldimensions isnot unanimousamongauthors. MinkovandHofstede (2011)reinforce that theirscientificphilosophy hasamoderateformofoperationalization(interdependenceof humanmindsandnetworks),thatthereisnoonebestwayofconstructingdimensionsandthat meritof models anddimensions depend on what researchers seekto explain (inthe context of the severaldisciplines andapproaches).In contraposition, Venaik andBrewer(2013),and Fang(2003),triedtodemonstratetheirrelevanceofthoseculturaldimensionsinthecontextof managementtheoryandpractice.Basedonthelackofscalesvalidity,theyarguethattheitems usedtomeasurethosedimensionsarenotpositivelyandsignificantlycorrelatedattheindividual ororganizationallevelandthereforedonotmeasure,culturally,anindividual,organization,or nation. Inthisscope, Blodgett etal.(2008)andFang(2003)provide that Hofstede’scultural instrument lackssufficient constructvalidity when applied atan individual or organizational level;however,anuncoherentstructurewasachievedrelatingthereliabilityofthetraditionalfour dimensions,inparticularatanindividualconsumerlevel.Atamacroeconomiclevel,Tangand

(6)

Koveos(2008)foundthatindividualism,powerdistance,andlong-termorientationdemonstrate a significantcurvilinear relationshipwithGrossDomestic Product (GDP) percapita, tending tochangeovertime.Thus,othermacroeconomicvariablesbasedonR&Doutcomes(basedon innovation, science,andknowledge) shouldbe included inthe theoreticalconstructs. In fact, the shiftof socialnorms reflects thechanges intheattitudes sharedbymost peoplewithin a society,subsequentlyaffectingtheculturalstandardsandinnovativeorientations.Althoughthe contradictory overviewsandapproaches on the Hofstede’scultural dimensions (Fang, 2003), it seemsunquestionable that societies, organizations, andindividuals, are driven bymultiple andcomplexpillarswhichcanenableordetracttheoverallinnovativeness.Hence,Cultureand Transparencyareused,inthescopeofthisresearch,asdriversofinnovationattractiveness.

Analyticalframework

Thecurrentresearchinvolves31Europeancountries(Appendix)andhasthemainobjectiveto explorethelinkagebetweenculture,transparencyandR&Dintensity,overtheperiod2010–2014. Itfollowsanexploratorymainstreamapproach,inthescopeofaphenomenoncharacterizedby objectivity, realism, functionalismandsocial change (Lopes,2015).Data was collectedfrom several sourcessuch as Eurostat(2016),TI (2016),andHofstedeetal. (2010). Basedonthe assumptionthatculture(powerdistance;individualism;masculinity;uncertaintyavoidance; long-term orientation, andindulgence), transparency (public sector level of corruption), and other macroeconomic variables(grossdomesticproduct;venturecapital;high-technologytrade;and humanresourcesemployedinscienceandtechnologyactivities),influenceR&Ddecisions,the coreeconometricspecification,usingpaneldata,isasfollows:

ˆ

RDit=β0+β1PDISi,t+β2INDi,t+β3MASCi,t+β4UAVOIi,t+β5LTORi,t +β6IVDi,t+β7TRANSPi,t+β8(GDP∗VCAP)_i,t+β9(THTEC∗HRST )_i,t + 5 r=1 βrDYi,t+εi,t (i=1,...,n;t=1,...,m;r=1,..,5) (1) Where:

RD is the logarithm of totalintramural R&D expenditures (business enterprise, public, and educationsegments),perinhabitant,forcountryiinyeart.

PDISistheHofstede’sculturaldimension“PowerDistance”(D1)forcountryiinyeart. INDistheHofstede’sculturaldimension“Individualism”(D2)forcountryiinyeart. MASCistheHofstede’sculturaldimension“Masculinity”(D3)forcountryiinyeart.

UAVOI is the Hofstede’s culturaldimension “Uncertainty Avoidance” (D4) for country i in yeart.

LTOR is the Hofstede’s culturaldimension “Long Term Orientation” (D5) for countryi in yeart.

IVDistheHofstede’sculturaldimension“Indulgence”(D6)forcountryiinyeart.

TRANSP–PublicSectorTransparencyscoreforcountryiinyeart,accordingtothe “Trans-parencyInternational”(2010–2014).

(7)

VCAPisthelogarithmofventurecapitalinvestmentforcountryiinyeart. THTECisthelogarithmoftotalhigh-techtradesforcountryiinyeart.

HRSTisthelogarithmofthenumberofpersonswithtertiaryeducationemployedinscienceand technologyforcountryiinyeart.

DYtisthetimeeffectovertheperiod2010–2014.

Variablesweresimultaneouslyintroducedinthemodel inordertoidentifywhichonescan predicttheR&Dintensityatacountrylevel(rejectionofH0:β1=β2=...=β8=0;p<α).Two complimentarymodelswereregressed:Model1incorporatesthetimeeffectsandModel2does notincludethoseeffects.Thus,basedontheliteraturetheoreticalbackground,weformulatethe followinghypotheses:

H1:R&DintensityisassociatedtotheHofstede’sculturaldimensions: H11–PowerDistance(D1);

H12–Individualism(D2); H13–Masculinity(D3);

H14–UncertaintyAvoidance(D4); H15–LongTermOrientation(D5); H16–Indulgence(D6);

H2:R&Dintensityispositivelyassociatedwiththepublicsectortransparencyscore. H3:R&Dintensitypositivelycorrelatedwithgrossdomesticproduct.

H4:R&Dintensityispositivelyassociatedwiththeintensityofventurecapitalinvestment. H5:R&Dintensityispositivelyassociatedwithcountry’stotalhigh-techtrade.

H6:R&Dintensityisassociatedwiththenumberofpersonsemployedinscienceandtechnology activities.

Thephenomenonunderanalysisiscomplexandhasmultivariatecausesandeffects.Although thelackofliteratureonthelinkageproposedforanalysis,R&D(IFRF,2004)asanintermediate stageofconclusiveinnovation,hasthepowertoembodyasetofskills,abilities,knowledge,and expertise, towardthe dynamictransformationof tacitknowledgeinto explicitknowledge(e.g. patents,software,alliances,rights,trademarks,technicaldesign,etc.).Thus,ourassumptionis thatonlyproactiveanddynamicinstitutions,supportedbyinnovativenationalpublicpoliciesand stronglyorientedtoefficientknowledgetransformationmechanisms,cansupportstrong R&D expenditures efforts (Ambos & Schlegelmilch, 2008; Newman, 2009; Skerlavaj et al., 2013; Stocketal.,2013).Inthisscope,cultureandtransparencycanactastheattractivenessdrivers, forcompaniesandindividualsinvolvedininnovativeactivities.

Resultsanddiscussion

Descriptivemeasuresandassociationmeasures

The descriptive statistics for the selected sample, are included in Table 1. The bivariate correlations(Pearson’scorrelationcoefficients) betweenthe variablesofinterestare shownin Table2.

(8)

Table1

Descriptivemeasures.

Variable n Minimum Maximum Mean Std.deviation Skewness Kurtosis

RD 155 3.32 7.31 5.62 1.21 −0.279 −1.195 PDIS 155 11 104 51.30 21.05 0.320 −0.452 IND 155 25 80 58.05 18.17 −0.467 −0.835 MASC 155 5 110 45.32 23.84 0.150 −0.492 UAVOI 155 23 112 69.39 21.72 −0.536 −0.788 LTOR 155 24 83 55.32 16.77 −0.041 −0.815 IVD 155 13 78 44.48 19.08 −0.047 −1.275 TRANSP 155 36 92 63.72 16.17 0.118 −1.264 GDP 150 8.79 14.89 11.94 1.58 0.032 −0.797 VCAP 145 0.00 9.96 4.21 3.24 −0.141 −1.367 THTEC 155 0.00 11.22 7.89 2.47 −1.942 1.259 HRST 155 4.16 9.98 7.40 1.44 −0.225 −0.328

Relatingthenormality,theresultsrevealedthatSkewnessisintherangeof+/−1.96which indicatesthatthedataarenormallydistributed(errorvariable).Thesameevidencewasobtainedfor Kurtosisstatisticswhicharedistributedovertherange[−1.367;1.259].TheKolmogorov–Smirnov testandShapiro–Wilktesthaveconfirmedthatvariablesarenormallydistributedforasignificance levelof10%(p>0.1).Relatingthehomogeneityofvariances,thetestofLevenehasfailedinthe rejectionofnullhypothesis(whichstatesthatdatahasnoheterocedasticityproblem).Thus,we haveproceededwiththeparametricanalysisforourtheoreticalconstruct.

Wealsorunthemulticollinearitydiagnosis,theresidualanalysis,andtheheteroscedasticity. TheVarianceInflationFactor(VIF)assessesthedegreeofmulticollinearityinthemodel.Thus, wefoundthatnoneoftheindependentvariablesofthecurrentresearchhasaVIFvaluecloseto 10,concludingthattheanalysisdoesnotobserveasevereprobleminmulticollinearity.Toward analysis of independence of residuals,we used the Durbin–Watson (DW) test. Basedon this statistics,wenotedthatanullhypothesisisrejected(d<dL)whichmeansthatresidualscannot describeanormaldistribution,confirmingthatthoseerrorsarepositivelyautocorrelated.However, accordingMontegomery,Peck,andVining(2001),theassumptionofuncorrelatedorindependent errorsfortimeseriesorpaneldataisoftennotappropriatebecauseitisusualtobeassociatedwith businessandeconomicphenomena.Relatingheteroscedasticity,weusedthetestofWhite,not rejectingthenullhypothesis(p>0.05).Thus,theevidencesprovidedbythecurrenteconometric modelcanserveasanimportantcontributiontotheoryandpractice.

As alreadymentioned, the phenomenon under analysis evidencesmultiple associations as illustratedbythebilateralcorrelations.Allvariables,exceptLTOR,THTEC,andHRST,arenot significantly correlated(p<α)withR&D. Thus,thisprimaryoverview confirmsour assump-tion that culture andtransparency influenceR&D, mostlywiththe expectedsignals. THTEC isnotassociatedwithR&D (r=−0.036;p=0.659),confirmingthatthereisnobilateraldirect associationbetweenR&Dandhigh-technologytrade.Thisevidencecorroboratestheoutcomes providedbyChanetal.(2003)thatthereisnocorrelationbetweenR&Dexpendituresandturnover derivedfrominnovation.Thehumanresourcesemployedinscienceandtechnologyseemstobe animportantdriverofinnovation,howevernotdirectlyinfluencingtheR&Dexpendituresand strategies.

AsdevelopedandarguedbyHofstedeetal.(2010),thesixculturaldimensionsarenot inde-pendentwhichcanbeconfirmedbytheassociationsbetweentheminthetableabove.Thehuman

(9)

I.T . Lopes, R.M. Serr asqueir o / Contaduría y Administr ación 62 (2017) 1408–1422 Table2

Pearson’scorrelationcoefficients.

VAR. RD PDIS IND MASC UAVOI LTOR IVD TRANSP GDP VCAP THTEC HRST

RD 1 PDIS −0.701*** ₁ IND 0.582*** _−0.628*** ₁ MASC −0.147* _0.252*** _0.036 ₁ UAVOI −0.520*** _0.641*** _−0.602*** _0.194** ₁ LTOR −0.121 0.188** _0.117 _0.145 _0.133 ₁ IVD 0.729*** _−0.549*** _0.430*** _−0.092 _−0.474*** _−0.444*** ₁ TRANSP 0.882*** _−0.679*** _0.570*** _−0.362*** _−0.578*** _−0.146* _0.678*** ₁ GDP 0.369*** −0.190** 0.390*** 0.173** −0.134 −0.023 0.274*** 0.311*** 1 VCAP 0.542*** −0.293*** 0.454*** −0.009 −0.164** −0.137 0.405*** 0.537*** 0.891*** 1 THTEC −0.036 −0.036 0.135 0.372*** 0.118 0.302*** −0.025 −0.052 0.605*** 0.480*** 1 HRST 0.094 −0.018 0.247*** 0.205** −0.006 0.074 0.039 0.039 0.945*** 0.776*** 0.682*** 1 * _p_<_0.1. ** _p_<_0.05. ***_p_<_0.01.

(10)

Table3

Regressionmodelequations.

Model1 Model2 β t VIF β t VIF Intercept 3.203 4.688*** _3.164 _4.771*** PDIS −0.032 −6.340*** _1.003 _−0.032 _−6.394*** _1.045 IND 0.007 1.555 2.342 0.008 1.607 2.340 MASC −0.006 −1.848* _2.784 _−0.006 _−1.886* _2.783 UAVOI 0.018 4.271*** _2.683 _0.018 _4.340*** _2.674 LTOR 0.010 2.993*** _1.460 _0.010 _2.963*** _1.454 IVD 0.016 2.718*** _2.567 _0.015 _2.701*** _2.545 TRANSP 0.022 3.214*** 2.629 0.023 3.474*** 2.508 GDP*VCAP 0.010 2.356** 1.921 0.009 2.230** 1.653 THTEC*HRST −0.009 −1.346 1.775 −0.008 −1.176 1.537

Timeeffects Yes No

Adj.R2₌ _0.858 _0.861 F= 44.980 66.427 Sig. <0.001 <0.001 DW 1.633 1.542 *_p_<_0.1. **_p_<_0.05. ***_p_<_0.01.

natureisthebasisofmentalprogramming,crossingallculturalpillars.Theothervariablesarealso correlatedinmanycases,identifyingawidesetofphenomenawhichrequirefurtherexploration anddiscussioninforthcomingandcomplimentaryresearches.

Theregressionmodels

This section contains the multivariate regression results (combined impact on R&D) for bothmodels:model1embodyingthetimeeffectsandmodel2notincorporatingthoseeffects. Bothmodelsevidenceahighadherencelevel(F=63.914andF=89.895;p<0.001,forModel1 andmodel2,respectively)andthevarianceofR&Disexplainedinapproximately86%. Com-paring the two modelsused, we didnot find any significanttimeeffects, confirmingthat the phenomenon under analysis is culturally and economicallydriven andfocused onlong term strategiesandpolicies.Theregressionequationsareindicatedbelow(Table3).

Asexpected,PDIS(β1=−0.032;p<0.001)influencesnegativelytheR&D.Thehigherpower distance,the lessthe R&Dexpenditures andinnovation basedstrategies.Literature(Hofstede etal.,2010)alsosupportsthepositiveimpactofIND,UAVOI,LTORandIVDonR&D.Infact, theseexpenditures are long-termoriented,levering themorecomplex innovation basedchain “Culture–R&D–Intangibles–EconomicBeneﬁts”into acompanyor nationalsustainability level (VanderPal,2015).Indulgenceisassociated withwell-educatedpopulations,more extro-vertedpersonalities,positiveattitude,amongotherattributes.Basedonthesetheoreticalconcerns, itwasexpectableapositiveimpactonR&Dstrategy,inlinewithitslongtermorientation. Relat-ingmasculinity,wefoundalowsignificancelevel,inparticularinthemodelwithtimeeffects. Thehybridnatureofthisdimensioncansupporttheresultsachieved(β3=−0.006;p=0.067). We have to underline that MASC is bilaterally associated to HRST (r=0.205; p=0.011),

(11)

2.5 2.0 1.5 1.0 0.5 0.0 –0.5 –1.0 –1.5 –2.0 –2.5 –1.5 –1.0 –0.5 0.0 0.5 1.0 1.5 2.0 2.5 GCI SK H PL M _IT B F UK NL G LX A GR CZ SL SP TR SR RO CR BL LT ES IR IC FI SW NW PT LV DN

Fig.1.CultureandR&DacrossEurope.

variablewithoutsignificantimpactonR&Dexpenditures.Thus,H1,includingthesub hypothe-ses,is notrejected, whichmeansthat R&D intensity isinfluenced bythe Hofstede’scultural dimensions.

TRANSP emerges in the current research as a novelty. Our assumption is that public sectorcorruptionisalsoembeddedinculture,affectingtheinnovationdecisionsandstrategies andtheattractivenesspowerof individualsandorganizations.Our assumptionwasconfirmed through thebilateralcorrelationsandthrough thecombinedeffectinbothmodels (β7=0.022 andβ7=0.023;p<0.001,formodel1andmodel2,respectively).Thehightransparencyscore, thehighR&Dintensityperinhabitant.Thus,H2cannotberejected.

ThecombinedeffectofGDPandVCAPispositiveandsignificantlyassociatedwithR&D (p<0.001).Thevaluecreationderivedfromuncertainandriskyenvironmentshasaleveraging impacton innovation.Not surprisingly, ourH3 andH4 cannotbe rejected whichconfirm the traditionaleconomicliterature.Finally,wefoundanegativeimpactfromtheconjointeffectof THTECandHRST(β9=−0.009andβ9=−0.008;p<0.001,formodel1andmodel2, respec-tively)onR&Dexpenditures.Withoutliteraturesupport,itseemsthatcountriesataconsolidate stageofdevelopment(withhigherratesofhightechnologytradeandhigherlevelofscienceand technologyemployment)tendtoreducetheirlevelsofR&Dexpenditures.Thisassumptiondoes notsupporttheliteratureconcerningthedynamismandsustainabilityoftheinnovationcycles. Despitethestatisticalsignificance,thesignofourhypothesisH5andH6isnotconfirmed.

TheintegratedoverviewbetweencultureandR&D

TheGlobalCultureIndex(GCI)isanon-weightedindexbasedonthesixHofstede’scultural dimensionsandaimstoprovideanintegratedoverviewacrossEurope,basedontwosocialand economicspillars:CultureandR&D.

TheinfluenceofcultureonR&Dintensitydoesnotseemtobeageographicalissue.Based onthe evidencesprovidedinFig.1,wecannot identifyspecificgeographical clusters,except

(12)

intheclusterofNordiccountriesandtheclusterofCentralEuropecountries.Inthiscase,we observe higherlevelsof GCIandR&DeffortsthaninEurope’s peripheralregions.TheR&D intensityisinfluencedbyculturedimensions,howeverdrivenbysocial,political,andeconomic factors.

Concludingremarksanddirections

Cultureandtransparencyembodyasetofhumanbeliefs,normsandactions,individualand collectivelyobservedwhichdriveorganizationsintoacertainlevelofdevelopmentandeconomic welfare.Thosepillarsarethebasisoftheinnovationchaintowardthedynamictransformationof knowledge.R&Dis,inourapproachandassumptions,alinkinthatchain,enablingordetracting the recognition ofintangiblesandsubsequent futureeconomic benefits.Without timeeffects, our econometric model provided evidenceson the impactof Hofstede’s culturaldimensions, thepublicsectortransparencyindex,andothermacroeconomicvariables,onR&Dexpenditures efforts.Thus,weunderlinethefollowingremarksandpotentialfuturedirections:

• All cultural dimensions are significantly correlated with R&D expenditures, however not geographicallyclustered.Asexpected,“PowerDistance”hasanegativeimpactwhile “Individ-ualism”,“UncertaintyAvoidance”,“Long-TermOrientation”,and“Indulgence”haveapositive signal.Althoughthenegativesignal,“Masculinity”hasaresidualsignificanceinour economet-ricmodel.TheseculturaldimensionscoreswereextractedformHofstedeetal.(2010)andhave been,overthelastdecades,beingquestionedabouttheirvalidityandrobustness(Fang,2003; Venaik&Brewer,2013).Itsapplicationshouldbediscussedandbalancedineachparticular scopeandscientificfield.

• The corruption of a countrylevel is bilaterally linked withculture and has apositive and significantimpactonR&Dnationalstrategies.Thus,thehightransparencylevelforthecountry, thehighR&Dexpendituresperinhabitant.ThePublicSectorTransparencyIndexispublished byanindependentorganizationonayearlybasis.Assecondarydata,thisscorecanbebiased bymethodologicalissueswhichcanalsobiasthecurrentoutcomes.

• Thevalue creationderived fromuncertainandriskyenvironmentshas aleveraging impact oninnovation,supportingthepositiveimpactofgrossdomesticproductandventurecapital investmentonR&Dexpenditures.Surprisingly,countrieswithaconsolidatedstageof devel-opment(withhigherratesofhightechnologytradeandhigherlevelofscienceandtechnology employment)tendtoreducetheirlevelsofR&Dintensity.

The empiricalresultsprovidebothanunderstandingof howculturaldimensionsand trans-parency affect the level or R&D expenditures at a country level. The research adds value to the current literature by introducing in an econometric model the six Hofstede’s cultural dimensions and, as anovelty, the public sectortransparency index provided by an indepen-dentorganization.Extendingboththenumberofcountriesunderanalysiscouldcorroborateor refute the evidence achievedin the current research.In the future, research maybe directed into a more precise identification of clusters and into the exploration of certain particular national policies on innovation. Other methodological approaches, such as a simultaneous-equationsmodelorgeneralizedmethodofmoments,canbeusedtowardmorerobustandaccurate outcomes.

(13)

Appendix–listofcountries. 1. B–Belgium 2. BL–Bulgaria 3. CZ–CzechRepublic 4. DN–Denmark 5. G–Germany 6. ES–Estonia 7. IR–Ireland 8. GR–Greece 9. SP–Spain 10. F–France 11. CR–Croatia 12. IT–Italy 13. LV–Latvia 14. LT–Lithuania 15. LX–Luxembourg 16. H–Hungary 17. M–Malta 18. NL–Netherlands 19. A–Austria 20. PL–Poland 21. PT–Portugal 22. RO–Romania 23. SL–Slovenia 24. SK–Slovakia 25. FI–Finland 26. SW–Sweden 27. UK–UnitedKingdom 28. IC–Iceland 29. NW–Norway 30. SR–Serbia 31. TR–Turkey References

Akinwale, Y.O.,Dada,A.D.,Oluwadare,A.J.,Jesuleye,O.A.,&Siyanbola,W. O.(2012).Understandingthe nexusofR&D.Innovation andeconomic growthin Nigeria.InternationalBusinessResearch,5(11),187–196, http://doi.org/10.5539/ibr.v5n11p187

Ambos,B.,&Schlegelmilch,B.B.(2008).Innovationinmultinationalfirms:Doesculturalfitenhanceperformance?

ManagementInternationalReview,48(2),189–206,http://doi.org/10.1007/s11575-008-0011-2

Blodgett,J.G.,Bakir,A.,&Rose,G.M.(2008).AtestofthevalidityofHofstede’sculturalframework.Journalof ConsumerMarketing,25(6),339–349,http://doi.org/10.1108/07363760810902477

Chan,L.K.C.,Lakonishok,J.,&Sougiannis,T. (2003).Thestockmarketvaluationofresearchanddevelopment expenditures.InJohnHand,&BaruchLev(Eds.),Intangibleassets:Values,measuresandrisks(pp.387–414). Oxford:OxfordUniversityPress.

Chen, C.,Hu,J.,& Yang,C.(2011).Aninternationalcomparisonof R&Defficiencyofmultipleinnovative out-puts:Theroleofthenationalinnovationsystem.Innovation:Management,Policy&Practice,13(1),341–360, http://doi.org/10.5172/impp.2011.13.3.341

(14)

Davenport,T.,&Prusak,L.(1998).Workingknowledge–Howorganisationsmanagewhattheyknow.Boston,MA: HarvardBusinessSchoolPress.

Deschryvere,M.(2014).R&D,firmgrowthandtheroleofinnovationpersistence:AnanalysisofFinnishSMEsandlarge firms.SmallBusinessEconomics,43(1),767–785,http://doi.org/10.1007/s11187-014-9559-3

Eurostat.(2016).Europeanstatistics.Availableathttp://ec.europa.eu/eurostat/data.Accessed16.05.16

Fernández-Jardón, C.,Costa, R.V., &Dorregio, P. F.(2014).Theimpactf structuralcapital onproduct innova-tionperformance:Anempiricalanalysis.InternationalJournalofKnowledge-BasedDevelopment,5(1),63–79, http://doi.org/10.1504/IJKBD.2014.059799

Fang,T. (2003).AcritiqueofHofstede’sfifthnationalculturedimension.InternationalJournalof CrossCultural Management,3(3),347–368,http://doi.org/10.1177/1470595803003003006

Fontana,R.,Nuvolari,A.,Shimizu,H.,&Vezzulli,A.(2012).Schumpeterianpatternsofinnovationandthesources ofbreakthroughinventions:Evidencefromadata-setofR&Dawards.JournalofEvolutionaryEconomics,22(1),

785–810,http://doi.org/10.1007/s00191-012-0287-z

Hofstede,G.(2001).Culture’sconsequences.InComparingvalues,behaviours,institutionsandorganizationsacross nations(2nded.).ThousandOaks,CA:SagePublications.

Hofstede,G.,Hofstede,G.J.,&Minkov,M.(2010).Culturesandorganizations.InSoftwareofthemind.Revisedand expanded(3rded.).NewYork:McGraw-Hill.

IFRF–InternationalFinancialReportingFoundation(2004).Internationalaccountingstandardno.38:Intangibleassets. Availableathttp://www.ifrs.org/IFRSs/Pages/IFRS.aspx.[accessed10.05.16]

Jewkes, J., Sawers, D., & Stillerman, R. (1958). The sources of invention. Revised edition 1969. London: MacMillan.

Kim,Y.,&Kim,S.(2010).Theinfluenceofculturalvaluesonperceptionsofcorporatesocialresponsibility: Applica-tionofHofstede’sdimensionstoKoreanpublicrelationspractitioners.JournalofBusinessEthics,91(1),485–500, http://doi.org/10.1007/s10551-009-0095-z

Kleinschmidt,E.J.,DeBretain,U.,&Salomo,S.(2007).Performanceofglobalnewproductdevelopmentprograms: Aresourcebasedview.JournalofProductInnovationManagement,24(5),419–441, http://doi.org/10.1111/j.1540-5885.2007.00261.x

Lev,B.,&Sougiannis,T.(1996).Thecapitalization,amortization,andvalue-relevanceofR&D.JournalofAccounting andEconomics,21(1),107–138,http://doi.org/10.1016/0165-4101(95)00410-6

Lopes, I.T. (2015).Researchmethodsand methodologytowards knowledgecreationinaccounting. Contaduríay Administración,60(S1),9–30,http://doi.org/10.1016/j.cya.2015.08.006

Malerba,F.(2005).Sectorialsystems:Howandwhyinnovationdiffersacrosssectors.InJ.Fagerberg,&D.C.Mowery (Eds.),TheOxfordhandbookofinnovation(pp.380–406).Oxford:OxfordUniversityPress.

Malerba,F.,&Orseningo,L.(1995).Schumpeterianpatternsofinnovation.CambridgeJournalofEconomics,19(1),

47–65,http://doi.org/10.1093/oxfordjournals.cje.a035308

Malerba,F.,&Orseningo,L.(1996).Schumpeterianpatternsofinnovationaretechnology-specific.ResearchPolicy, 25(1),451–478,http://dx.doi.10.1016/0048-7333(95)00840-3

Minkov,M.,&Hofstede,G.(2011).TheevolutionofHofstede’sdoctrine.CrossCulturalManagement:AnInternational Journal,18(1),10–20,http://doi.org/10.1108/13527601111104269

Montegomery,D.C.,Peck,E.A.,&Vining,G.G.(2001).Introductiontolinearregressionanalysis(3rded.).NewYork: JohnWiley&Sons.

Pavitt,K.(1984).Patternsoftechnicalchange:Towardsataxonomyandatheory.ResearchPolicy,13(1),343–373, http://doi.org/10.1016/0048-7333(84)90018-0

Newman,J.L.(2009,September–October).Buildingacreativehigh-performanceR&Dculture.ResearchTechnology Management,21–31.

Rujirawanich,P.,Addison,R.,&Smallman,C.(2011).TheeffectsofculturalfactorsoninnovationinaThaiSME.

ManagementResearchReview,34(12),1264–1279,http://doi.org/10.1108/01409171111186397

Skerlavaj,M.,Su,C.,&Huang,M.(2013).Themoderatingeffectsofnationalcultureonthedevelopmentoforganizational learningculture:Amultilevelstudyacrosssevencountries.JournalofEastEuropeanManagementStudies,18(1),

97–134.

Stock,R.M.,Six,B.,&Zacharias,N.(2013).Linkingmultiplelayersofinnovation-orientedcorporateculture,product programinnovativeness,andbusinessperformance:Acontingencyapproach.JournaloftheAcademyofMarketing Science,41(1),283–299,http://doi.org/10.1007/s11747-012-0306-5

Tahinakis,P.,&Samarinas,M.(2013).R&Dexpendituresandinvestors’perceptionforaninputoninnovationcreation andfirmgrowth:EmpiricalevidencefromAthensstockexchange.TheJournalofAppliedBusinessResearch,29(1),

(15)

Tang, L., & Koveos, P. E. (2008). A framework to update Hofstede’s culturalvalue indices: Economic dynam-ics and institutional stability. Journal of International Business Studies, 39(1), 1045–1063, http://doi.org/ 10.1057/palgrave.jibs.8400399

TI–TransparencyInternational.(2016).Corruptionperceptions.Availableathttp://www.transparency.org.[accessed 28.03.16]

VanderPal,G.A.(2015).ImpactofR&Dexpensesandcorporatefinancialperformance.JournalofAccountingand Finance,15(7),135–149.

Venaik,S.,&Brewer,P.(2013).CriticalissuesintheHofstedeandGLOBEnationalculturemodels.International MarketingReview,30(5),469–482,http://doi.org/10.1108/IMR-03-2013-0058