Religion and innovation. A country institutional approach

Abstract

Given the importance of religion as a norm setting mechanism and the extant literature that has neglected its impact on firms, we examine the role of religion as an antecedent of firm-level innovation. We utilize a country institutional profile approach focusing on the cognitive, normative, and regulative aspects of religion and how they are related to firm-level innovation. We hypothesize that religion affects the country-level environment and impacts firm-level behavior regarding innovation. We, therefore, synthesize arguments from the economics and international business literature and test our hypothesis on a sample of firms from 30 countries. We find partial support for the hypotheses, which provide interesting insights into the relationships between a firm level construct and religion.