The Whole Beyond the Parts: A Configurational Analysis of Cultural and Institutional Effects on Innovation

Tamilina, Larysa and Akaliyski, Plamen (2026): The Whole Beyond the Parts: A Configurational Analysis of Cultural and Institutional Effects on Innovation.

Abstract

Innovation is widely recognized as a fundamental driver of long-term economic and societal prosperity, prompting extensive research into its determinants. Although culture and formal institutions are increasingly acknowledged as critical antecedents of innovation, empirical evidence remains limited regarding how these factors combine to either facilitate or constrain national innovation performance. This study investigates the joint effects of individualism–collectivism and formal institutions on both low and high innovation. Using fuzzy-set qualitative comparative analysis (fsQCA) on a sample of 80 countries, we identify multiple configurations of cultural and institutional conditions associated with divergent innovation outcomes. Our findings indicate that innovation is shaped by asymmetric patterns of sufficiency between cultural and institutional factors. High innovation requires their joint presence, while low innovation can arise from multiple forms of institutional or cultural deficiency. Building on this asymmetric relationship, we propose a novel typology of national innovation regimes.

• Item Type: MPRA Paper
• Language: English
• Keywords: Innovation, culture, individualism-collectivism, formal institutions, fsQCA
• Subjects: C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General; Z - Other Special Topics > Z0 - General

References

Acemoglu, D., Aghion, P., & Zilibotti, F. (2003). Distance to frontier, selection, and economic growth. Journal of the European Economic Association, 1(1), 37–74.

Akaliyski, P., Vignoles, V. L., Welzel, C., & Minkov, M. (2026). Individualism–collectivism: Reconstructing Hofstede’s dimension of cultural differences. Journal of Personality and Social Psychology, 130(2), 308–356. https://doi.org/10.1037/pspp0000580

Bennett, D. L., & Nikolaev, B. (2021). Historical disease prevalence, cultural values, and global innovation. Entrepreneurship Theory and Practice, 45(1), 145–174. https://doi.org/10.1177/1042258720914506

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(1), 1–16.

Boudreaux, C., & Nikolaev, B. (2019). Capital is not enough: Opportunity entrepreneurship and formal institutions. Small Business Economics, 53, 709–738.

Brush, G. J., Guo, X., Hunting, A., & Frethey-Bentham, C. (2024). Using qualitative comparative analysis to identify complex solutions and optimal combinations of conditions influencing COVID vaccine acceptance: A primer for QCA. Journal of Macromarketing, 44(2), 276–306. https://doi.org/10.1177/02761467231182300

Castellacci, F. (2023). Innovation and social welfare: A new research agenda. Research Policy, 37(4), 1156–1191.

Cox, P. L., & Khan, R. H. (2017). Country culture and national innovation. Archives of Business Research, 5(2), 85–101. https://doi.org/10.14738/abr.52.2768

Duarte, M., & Carvalho, F. (2025). Industrial diversity, formal, and informal institutions: A configurational moderation of the innovation input–output relationship. Economics of Innovation and New Technology, 34(8), 1203–1222.

Dusa, A. (2019). QCA with R: A comprehensive resource. Cham: Springer International Publishing.

Dutta, S., Lanvin, B., Wunsch-Vincent, S., & León, L. R. (Eds.). (2022). Global Innovation Index 2022: What is the future of innovation-driven growth? World Intellectual Property Organization.

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

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.

Fan, D., Li, Y., & Chen, L. (2017). Configuring innovative societies: The crossvergent role of cultural and institutional varieties. Technovation, 66–67, 43–56.

Fiss, P. C. (2011). Building better causal theories: A fuzzy set approach to typologies in organization research. Academy of Management Journal, 54(2), 393–420.

Fuentelsaz, L., González, C., & Maícas, J. P. (2019). Formal institutions and opportunity entrepreneurship: The contingent role of informal institutions. Business Research Quarterly, 22, 5–24. https://doi.org/10.1016/j.brq.2018.06.002

Gelfand, M. J., Lim, B.-C., & Raver, J. L. (2004). Culture and accountability in organizations: Variations in forms of social control across cultures. Human Resource Management Review, 14(1), 135–160. https://doi.org/10.1016/j.hrmr.2004.02.007

Glaesser, J. (2023). Limited diversity and QCA solution types: Assumptions and their consequences. Quality & Quantity, 57, 3485–3497.

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

Greif, A. (1994). Cultural beliefs and the organization of society: A historical and theoretical reflection on collectivist and individualist societies. Journal of Political Economy, 102(5), 912–950.

Grigoryan, L. K., Lebedeva, N., & Breugelmans, S. M. (2018). A cross-cultural study of the mediating role of implicit theories of innovativeness in the relationship between values and attitudes toward innovation. Journal of Cross-Cultural Psychology, 49(2), 336–352. https://doi.org/10.1177/0022022116656399

Henrich, J. (2020). The WEIRDest people in the world: How the West became psychologically peculiar and particularly prosperous. London: Penguin UK.

Hofstede, G. (2001). Culture’s consequences: Comparing values, behaviors, institutions, and organizations across nations (2nd ed.). Thousand Oaks, CA: Sage Publications.

Holmes, R. M., Jr., 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. https://doi.org/10.1177/0149206310393503

Kaasa, A. (2013). Culture as a possible factor of innovation: Evidence from the European Union and neighbouring countries. SEARCH Working Paper, WP5/05.

Kaasa, A. (2025). What is the recipe for high or low general trust? International Journal of Sociology, 55(2), 90–112. https://doi.org/10.1080/00207659.2024.2429240

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.

Kaltenberg, M., Jaffe, A. B., & Lachman, M. E. (2023). Invention and the life course: Age differences in patenting. Research Policy, 52(1), Article 104629. https://doi.org/10.1016/j.respol.2022.104629

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, Article 101109. https://doi.org/10.1016/j.envc.2025.101109

Komisarof, A., & Akaliyski, P. (2025). New developments in Hofstede’s individualism–collectivism: A guide for scholars, educators, trainers, and other practitioners. International Journal of Intercultural Relations, 107, 102200. https://doi.org/10.1016/j.ijintrel.2025.102200

Li, Y., & Zahra, S. A. (2012). Formal institutions, culture, and venture capital activity: A cross-country analysis. Journal of Business Venturing, 27(1), 95–111.

Liao, Z., & Wu, Y. (2025). Formal institutions, informal institutions, and firms’ environmental innovation: An application of the fuzzy set qualitative comparative analysis method. Sustainable Development, 33(1), 668–680. https://doi.org/10.1002/sd.3151

Maradana, R. P., Pradhan, R. P., Dash, S., et al. (2017). Does innovation promote economic growth? Evidence from European countries. Journal of Innovation and Entrepreneurship, 6, Article 1. https://doi.org/10.1186/s13731-016-0061-9

Minkov, M. (2018). A revision of Hofstede’s model of national culture: Old evidence and new data from 56 countries. Cross Cultural & Strategic Management, 25(2), 231–256.

Minkov, M., & Kaasa, A. (2022). Do dimensions of culture exist objectively? A validation of the revised Minkov–Hofstede model of culture with World Values Survey items and scores for 102 countries. Journal of International Management, 28(4), Article 100971. https://doi.org/10.1016/j.intman.2022.100971

Minkov, M., Dutt, P., Schachner, M., Morales, O., Sanchez, C., Jandosova, J., Khassenbekov, Y., & Mudd, B. (2017). A revision of Hofstede’s individualism–collectivism dimension: A new national index from a 56-country study. Cross Cultural & Strategic Management, 24(3), 386–404. https://doi.org/10.1108/CCSM-11-2016-0197

Misangyi, V. F., Greckhamer, T., Furnari, S., Fiss, P. C., Crilly, D., & Aguilera, R. (2017). Embracing causal complexity: The emergence of a neo-configurational perspective. Journal of Management, 43(1), 255–282.

Naveed, A., & Shabbir, G. (2022). Effect of formal and informal institutional indicators on innovation activities: An empirical analysis for a global sample. Social Indicators Research, 164, 665–691. https://doi.org/10.1007/s11205-022-02975-w

Nikolaev, B., Boudreaux, C., & Salahodjaev, R. (2017). Are individualistic societies less equal? Evidence from the parasite stress theory of values. Journal of Economic Behavior & Organization, 138, 30–49.

North, D. C. (1991). Institutions, institutional change and economic performance. Cambridge: Cambridge University Press.

Pappas, I. O., & Woodside, A. G. (2021). Fuzzy-set qualitative comparative analysis (fsQCA): Guidelines for research practice in information systems and marketing. International Journal of Information Management, 58, 102310.

Patterson, F. (1999). The innovation potential indicator: Test manual and user’s guide. Oxford: Oxford Psychologists Press.

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), Article 1730001.

Ragin, C. C. (2008). Redesigning social inquiry: Fuzzy sets and beyond. Chicago: University of Chicago Press.

Rinne, T., Steel, G. D., & Fairweather, J. (2012). Hofstede and Shane revisited: The role of power distance and individualism in nation-level innovation success. Cross-Cultural Research, 46(2), 91–108.

Rossberger, R. J., & Krause, D. E. (2012). National culture, heterogeneity, and innovation. GSTF Journal of Law and Social Sciences, 2(1), 84–89.

Saridakis, C., Zaefarian, G., Ganotakis, P., & Angelidou, S. (2022). A step-by-step guide of (fuzzy set) qualitative comparative analysis: From theory to practice via an implementation in a B2B context. Industrial Marketing Management, 107, 92–107. https://doi.org/10.1016/j.indmarman.2022.09.026

Schneider, C. Q., & Wagemann, C. (2012). Set-theoretic methods for the social sciences: A guide to qualitative comparative analysis. Cambridge: Cambridge University Press.

Shane, S. (1992). Why do some societies invent more than others? Journal of Business Venturing, 7, 29–46.

Taras, V., & Steel, P. (2009). Beyond Hofstede: Challenging the ten commandments of cross-cultural research. In Beyond Hofstede (pp. 40–60). Basingstoke: Palgrave Macmillan UK. https://doi.org/10.1057/9780230240834_3

Tebaldi, E., & Elmslie, B. (2013). Does institutional quality impact innovation? Evidence from cross-country patent-grant data. Applied Economics, 45(7), 887–900. https://doi.org/10.1080/00036846.2011.613777

United Nations, Department of Economic and Social Affairs, Population Division. (2024). World Population Prospects 2024 [Data set].

Waarts, E., & van Everdingen, Y. (2005). The influence of national culture on the adoption status of innovations: An empirical study of firms across Europe. European Management Journal, 23(6), 601–610.

Welzel, C., Kruse, S., Brunkert, L., & Brieger, S. A. (2025). The cool water effect: The geo-climatic source of Western exceptionalism. Cham: Springer International Publishing. https://doi.org/10.1007/978-3-031-81861-5

Williams, L. K., & McGuire, S. J. (2010). Economic creativity and innovation implementation: The entrepreneurial drivers of growth? Evidence from 63 countries. Small Business Economics, 34, 391–412.

Woodside, A. G. (2013). Moving beyond multiple regression analysis to algorithms: Calling for adoption of a paradigm shift from symmetric to asymmetric thinking in data analysis and crafting theory. Journal of Business Research, 66(4), 463–472.

Woodside, A. G. (2016). The good practices manifesto: Overcoming bad practices pervasive in current research in business. Journal of Business Research, 69(2), 365–381.

World Bank. (2024). International migrant stock (% of population) (SM.POP.TOTL.ZS) [Data set]. World Development Indicators. Retrieved from https://databank.worldbank.org/source/world-development-indicators

World Bank. (2024). School enrollment, tertiary (% gross) (SE.TER.ENRR) [Data set]. World Development Indicators. Retrieved from https://databank.worldbank.org/source/world-development-indicators

World Bank. (2025). Worldwide Governance Indicators. Retrieved from https://www.worldbank.org/en/publication/worldwide-governance-indicators

Xu, C., & Gong, W. (2024). The influence of individualism/collectivism orientation on university teachers’ bootleg innovation: Mediating effect of informal organizational norms and moderating effect of environmental uncertainty. SAGE Open, 1–14.