The whole beyond the parts: a configurational analysis of cultural and institutional effects on innovation

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.