Effects of Sub-National Political Institutions on Localized Innovation: Evidence From United States Counties
DOI:
https://doi.org/10.33423/jabe.v26i6.7419Keywords:
business, economics, institutional influence, sub-national institutions, political institutions, political power, innovationAbstract
This study investigates the influence of political institutions on innovation at the sub-national level in the United States, an area less explored compared to national contexts. It examines how political affiliations impact innovation support and outcomes, which are crucial indicators of economic development. The analysis focuses on county-level political affiliation, calculated as the mean percentage of Democratic versus Republican votes across five presidential elections. Data from over 94% of US counties were analyzed using hierarchical linear regression. The study evaluates the relationship between political affiliation and four measures of innovation, including support factors like venture capital and business incubators, as well as outcomes such as patents and initial public offerings. The findings indicate that counties leaning Democratic create a more favorable political environment for innovation. These results underscore the significant role of political institutions in fostering innovative business activities at the sub-national level, providing insights for policymakers and stakeholders aiming to enhance local economic growth.
References
Bacon, N., Wright, M., Ball, R., & Meuleman, M. (2013). Private equity, HRM, and employment. Academy of Management Perspectives, 27(1), 7–21.
Beck, T., Clarke, G., Groff, A., Keefer, P., & Walsh, P. (2001). New tools in comparative political economy: The database of political institutions. The World Bank Economic Review, 15(1), 165–176.
Birkinshaw, J., Hamel, G., & Mol, M.J. (2008). Management innovation. Academy of Management Review, 33(4), 825–845.
Boubakri, N., Cosset, J.C., & Saffar, W. (2013). The role of state and foreign owners in corporate risk-taking: Evidence from privatization. Journal of Financial Economics, 108(3), 641–658.
Chan, C.M., Isobe, T., & Makino, S. (2008). Which country matters? Institutional development and foreign affiliate performance. Strategic Management Journal, 29(11), 1179–1205.
Christensen, C.M., Raynor, M.E., & McDonald, R. (2015). What is disruptive innovation. Harvard Business Review, 93(12), 44–53.
Dai, Y., Li, H., Xie, W., & Deng, T. (2022). Power distance belief and workplace communication: The mediating role of fear of authority. International Journal of Environmental Research and Public Health, 19(5).
Datta, S., & Iskandar‐Datta, M.E. (1996). Who gains from corporate asset sales? Journal of Financial Research, 19(1), 41–58.
Democratic Party. (2016). Party Platform. Retrieved from https://democrats.org/where-we-stand/party-platform/
Dyer, J.H., Gregersen, H.B., & Christensen, C.M. (2011). The innovator's DNA: Mastering the five skills of disruptive innovators. Harvard Business Press. Boston MA USA.
Feldman, S., & Johnston, C. (2014). Understanding the determinants of political ideology: Implications of structural complexity. Political Psychology, 35(3), 337–358.
Gaur, A.S., Delios, A., & Singh, K. (2007). Institutional environments, staffing strategies, and subsidiary performance. Journal of Management, 33(4), 611–636.
Gimpel, J.G., Lovin, N., Moy, B., & Reeves, A. (2020). The urban–rural gulf in American political behavior. Political Behavior, pp. 1–26.
Goren, P., Federico, C.M., & Kittilson, M.C. (2009). Source cues, partisan identities, and political value expression. American Journal of Political Science, 53(4), 805–820.
Henderson, R.M., & Clark, K.B. (1990). Architectural innovation: The reconfiguration of existing product technologies and the failure of established firms. Administrative Science Quarterly, 35(1), 9–30.
Hill, M.D., Kelly, G.W., Lockhart, G.B., & Van Ness, R.A. (2013). Determinants and effects of corporate lobbying. Financial Management, 42(4), 931–957.
Hillman, A.J., Keim, G.D., & Schuler, D. (2004). Corporate political activity: A review and research agenda. Journal of Management, 30(6), 837–857.
Holmes, Jr, R.M., Miller, T., Hitt, M.A., & Salmador, M.P. (2013). The interrelationships among informal institutions, formal institutions, and inward foreign direct investment. Journal of Management, 39(2), 531–566.
Indiana Business Research Center. (2016). Innovation 2.0. Kelley School of Business, Indiana University. Retrieved from http://www.statsamerica.org/ii2/overview.aspx
Johnson, A.F., & Roberto, K.J. (2018). Right versus left: How does political ideology affect the workplace?. Journal of Organizational Behavior, 39(8), 1040–1043.
Jost, J.T. (2006). The end of the end of ideology. American Psychologist, 61(7), 651.
Jost, J.T., Federico, C.M., & Napier, J.L. (2009). Political ideology: Its structure, functions, and elective affinities. Annual Review of Psychology, 60, 307–337.
Kahn, K.B. (2018). Understanding innovation. Business Horizons, 61(3), 453–460.
Klingebiel, R., & Rammer, C. (2021). Optionality and selectiveness in innovation. Academy of Management Discoveries, 7(3), 328–342.
Kostova, T., & Zaheer, S. (1999). Organizational legitimacy under conditions of complexity: The case of the multinational enterprise. Academy of Management Review, 24(1), 64–81.
Layman, G.C., Carsey, T.M., & Horowitz, J.M. (2006). Party polarization in American politics: Characteristics, causes, and consequences. Annual Review Political Science, 9, 83–110.
Lee, S.M., & Peterson, S.J. (2000). Culture, entrepreneurial orientation, and global competitiveness. Journal of World Business, 35(4), 401–416.
Mason, L. (2015). “I disrespectfully agree”: The differential effects of partisan sorting on social and issue polarization. American Journal of Political Science, 59(1), 128–145.
McKee, S.C. (2008). Rural voters and the polarization of American presidential elections. PS: Political Science & Politics, 41(1), 101–108.
MIT Election Data and Science Lab. (2018). County Presidential Election Returns 2000-2016. https://doi.org/10.7910/DVN/VOQCHQ, Harvard Dataverse, V6, UNF:6:ZZe1xuZ5H2l4NUiSRcRf8Q== [fileUNF]
Neter, J., Kutner, M.H., Wasserman, W., & Nachtsheim, C.J. (1996). Applied Linear Regression Models. Homewood, IL: Irwin.
North, D.C. (1991). Institutions. Journal of Economic Perspectives, 5(1), 97–112.
Pe’Er, A., & Gottschalg, O. (2011). Red and blue: The relationship between the institutional context and the performance of leveraged buyout investments. Strategic Management Journal, 32(12), 1356–1367.
Peng, M.W., & Lebedev, S. (2017). Intra-national business (IB). Asia Pacific Journal of Management, 34, 241–245.
Peng, M.W., Sun, S.L., Pinkham, B., & Chen, H. (2009). The institution-based view as a third leg for a strategy tripod. Academy of Management Perspectives, 23(3), 63–81.
Pew Research Center. (2014). Religious landscape study. Pew Research Center. Retrieved from https://www.pewforum.org/about-the-religious-landscape-study/
Republican Party. (2016). Republican Platform 2016. Retrieved from https://prod-cdn-static.gop.com/media/documents/DRAFT_12_FINAL%5B1%5D-ben_1468872234.pdf
Scott, S.M. (1995). Institutions and organizations. Thousand Oaks, CA: Sage.
Slaper, T.F., Hart, N.R., Hall, T.J., & Thompson, M.F. (2011). The index of innovation: A new tool for regional analysis. Economic Development Quarterly, 25(1), 36–53.
Tan, J. (2001). Innovation and risk-taking in a transitional economy: A comparative study of Chinese managers and entrepreneurs. Journal of Business Venturing, 16(4), 359–376.
Williamson, O.E. (2000). Economic institutions and development: A view from the bottom. In Kahkonen, S., & Olson, M. (Eds.), A New Institutional Approach to Economic Development, pp. 92–118.
