Hofstede’s cultural dimensions and R&D intensity as an innovation strategy: a view from different institutional contexts

Abstract

The impact of all six of Hofstede’s cultural dimensions (power distance, individualism/collectivism, masculinity/femininity, uncertainty avoidance, long-term/short-term orientation, and restraint/indulgence) on business innovation practice has not, to the best of our knowledge, been hitherto examined. Past research has focused on four or five of these cultural dimensions. The aim of this study is therefore to analyze how corporate innovation policies are affected by all these dimensions in a sample of firms operating in different countries. The paper draws on institutional theory, whereby firms domiciled in the same institutional context will behave in a similar manner and their decisions on innovation practices will therefore also be similar. The findings show that the cultural dimensions of power distance, masculinity, uncertainty avoidance, and long-term orientation are positively associated with innovation, while individualism has a negative effect, and indulgence has no effect whatsoever.