Law, Culture, and Innovation | Asian Development Bank

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Law, Culture, and Innovation

Publication | November 2017
Law, Culture, and Innovation

Intellectual property rights and other legal mechanisms drive innovation more than cultural attitudes do in Southeast Asia.

We review theoretical and empirical research on the relationship between legal systems and innovation, and culture and innovation. We highlight legal and cultural forces that encourage innovation activities, including strong patent protection, entrepreneur-friendly bankruptcy laws, and strong labor laws, as well as policies that encourage risk taking and a long-term orientation. We provide a snapshot of recent cross-national data that confirms some of these lessons from prior studies. In the subset of Southeast Asian countries, the most recent data indicate that intellectual property rights are relatively more important and culture is relatively less important for patents. We discuss implications for future research, as well as lessons for policy makers.