This article works with the hypothesis that institutional conditions have an important role to play in shaping the performance of R&D expenditures in laggard innovation systems. We have assessed 51 developing countries over the period 1980-2008. Dependent constructs consist in (i) labor productivity; and (ii) patenting activity. Three different measures of institutional quality were used: control of corruption, democratic predominance, and political rights. Results support the proposition that institutional quality matters for the efficiency of innovation inputs. The main implication concerns the need for improved institutional frameworks within developing countries in order to generate appropriate outcomes from R&D investments.


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