Does partisan conflict affect US innovation?

Abstract

ABSTRACT This article explores the influence of partisan conflict on innovation using panel data of 48 mainland US states over the period from 1992 to 2013. A novel indicator of the US partisan conflict, first proposed by Professor Marina Azzimonti, is employed. The nonlinear nexus is tested by accommodating cubic polynomial functional forms. Results show that the relationship between partisan conflict and innovation presents an inverted N-shape with two turning points. That is, the effect might change with partisan conflict. To further study the heterogeneous impact of partisan conflict across different economic development levels, this article divides these states into high- and low-income groups. Subsample analysis concludes that the relationship between partisan conflict and innovation is inverted N-shaped in both high- and low-income groups. A comparative analysis of the turning points between these two groups is conducted. The findings contribute to previous studies in identifying the role of partisan conflict in innovation.