Abstract
The aim of this study is to verify the effect of economic freedom on national innovation. Linear regression models were used, as well as the DP2 technique to synthesize the indicators of the Global Innovation Index and the Index of Economic Freedom in the period from 2013 to 2018. The sample covers 86 to 105 countries, according to each year analyzed. The relations were verified in light of the Institutional Economic Theory and the countries were analyzed according to the level of economic development. National innovation is made up of inputs and the production of innovation, covering factors that are necessary to develop innovation in a country. Innovation inputs include issues of human capital and research, institutions, infrastructure, market and business, all at a national level. The production of innovation is the output of knowledge and technology and creative results. The results show that economic freedom positively assists national innovation and innovation input, more specifically in developing countries. Regarding the production of innovation, the relationship is greater for developed countries. Economic freedom can promote the determinants that lead to input or to the production of innovation, which will depend on the stage of development that the country is in. National innovation reacts in response to the institutions rooted in the country in question.
Keywords:
Economic freedom; National innovation; Institutions; Developing countries; Economic development