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423898
23898Rinne et al.Cross-Cultural Research
2012 SAGE Publications
CCR46210.1177/10693971114
Cross-Cultural Research
46(2) 91108
2012 SAGE Publications
Reprints and permission: http://www.
sagepub.com/journalsPermissions.nav
DOI: 10.1177/1069397111423898
http://ccr.sagepub.com
Abstract
Hofstedes value dimensions offer a measure of one component of culture
(cultural values) and are a means of gaining greater understanding of the
role culture plays in national innovation success. Hofstedes (1980) cultural
measures of individualism, uncertainty avoidance, and power distance, for
example, have been shown to be correlated to the number (per capita) of
trademarks (Shane, 1993). Via multivariate multiple linear regression, we
assess the link between Hofstedes measures of cultural values and innovation as measured by the Global Innovation Index (GII). Our analyses show
a strong negative relationship between Hofstedes dimensions of power distance and GII innovation scores as well as a strong positive relationship
between individualism and GII innovation scores. No relationship was found
for Hofstedes measure of uncertainty avoidance.
Keywords
culture, innovation, hofstede, power distance, individualism
1
Corresponding Author:
Tiffany Rinne, Agribusiness and Economics Research Unit, P.O. Box 84,
Lincoln University, Lincoln 7647, New Zealand
Email:tiffany.rinne@lincoln.ac.nz
92
In a world that has moved swiftly to global trade, innovation rates have
become one of the tools by which nations and businesses achieve success in
the world. For example, Wind et al. (1990) show that new products, typically
derived from innovation, explain one quarter to one third of financial growth
in businesses. In many cases, businesses and organizations have an innovation imperative in which innovation is deemed necessary for both growth
and survival. With the recognition of the importance of innovation for success at both the business and national levels, scholars have become interested
in investigating what factors help and hinder innovation.
In this article, we look at the role culture plays in influencing national
levels of innovation. Culture is hard to conceptualize and definitions abound.
At its broadest, culture is defined as . . . that complex whole which includes
knowledge, belief, art, morals, law, custom, and any other capabilities and
habits acquired by man as a member of society (Tylor,1958, p. 1). A more
narrow and cognitively oriented definition is that of Geertz (1973, p. 89),
who defined culture as . . . an historically transmitted pattern of meanings
embodied in symbols, a system of inherited conceptions expressed in symbolic forms by means of which men communicate, perpetuate, and develop
their knowledge about and attitudes towards life.
Scholars have long contended that culture influences economic behavior
(Smith, 1776; Weber, 1905), government policies (Fukuyama, 1995; Jin,
2001), and national institutions and business systems (Fukuyama, 1995;
Geertz, 1973; Hall, 1990; Hampden-Turner & Trompenaars, 1993; Hofstede,
1980; Jin, 2001; Lipset, 1990). Thus, it is not difficult to argue that culture
plays a key role in influencing national innovation success. Hofstedes (1980)
cultural measures of individualism and power distance, for example, have been
shown to be correlated to the number (per capita) of patents for inventions
(Shane, 1992) while individualism, power distance, and uncertainty avoidance
have been shown to be correlated to number of trademarks (Shane, 1993).
The value dimensions defined by Hofstede (1980, 2001) offer a measure of
one component of culture (cultural values) and are a means of gaining greater
understanding of the role culture plays in national innovation success.
However, the work to date is limited by the use of patent and trademark data
as a proxy for innovation. The intention of this article is to deepen our understanding of Hofstedes measures of cultural values and their link to innovation
by looking at more comprehensive measures of innovation than trademarks
and patents. We examine the relationship between Hofstedes cultural value
dimensions and country scores on the Global Innovation Index (GII).
We start the article by providing an overview of the GII and its component
measures. We then look at Hofstedes value dimensions and their relationships
Rinne et al.
93
to innovation followed by a discussion of the research methods. The subsequent sections examine the relationships found between Hofstedes measures
of cultural values and differences in national innovation scores on the GII.
Our multivariate multiple linear regression analyses show a strong negative
relationship between Hofstedes dimensions of power distance and GII innovation scores and a strong positive relationship between individualism and
GII innovation scores. These results suggest a link between cultural dimensions and innovation indicating that it occurs for more sophisticated measures of innovation than trademarks and patents.
The GII
The GII (INSEAD, 2009) consists of five input measures (termed pillars) for
innovation and two output measures (pillars). The inputs are those things that
enable an economy to be innovative. In other words, those things that help
provide a conducive environment for innovation. Outputs are the results of a
nations innovative activities.
The five input pillars are institutions and policies, human capacity, general
and ICT infrastructure, market sophistication, and business sophistication
(see Figure 1). The Institutions and Policies pillar attempts to capture the
macroeconomic stability and the institutional framework of a country
(INSEAD, 2009, p. 21). A regulatory framework which helps to attract businesses through incentives and protection is deemed essential for all nations
wishing to achieve in innovation. The Human Capacity pillar refers to education standards and research activity within a nation as these are believed to be
important determinants of innovation capacity. The General and ICT
Infrastructure pillar is considered an important measure because appropriate
infrastructure is needed to feed the national innovation system. Infrastructure
fosters growth in businesses, raises the standard of living, and increases productivity and efficiency levels. Infrastructure is considered the backbone of
any economy. The Market Sophistication pillar tries to capture the state of
credit availability and the condition of creditors and investors in an economy (INSEAD, 2009, p. 23). The financial is important to assess as it is
considered an important measure of economic well-being and is a focus of
significant government policies. Finally, the business sophistication pillar
tries to capture the nature of the business environment and its conduciveness
to innovation activity in the economy (INSEAD, 2009, p. 24).
The two GII output measures included scientific outputs and creative outputs and well-being (see Figure 2). The first pillar of the outputs encompasses
factors like patent numbers and number of scientific publications. It is meant
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Rinne et al.
95
group but not with members of other nations, regions, or groups (Hofstede,
1983, p. 76). From 1967 to 1978, using systematically collected data from a
large number of national cultures, Hofstede sought to develop empirically
based terminologies to describe different cultures. Working as a psychologist
for IBM, Hofstede collected data on employee attitudes and values in multiple cultures via standardized paper questionnaires. Values were defined as
desires and assessed via questions ascertaining preferences. More than
116,000 questionnaires were collected for 40 countries. Questionnaires at
IBM were administered twice, once between 1967 and 1971 and again
96
Rinne et al.
97
the free gratification of human desires. On the opposite pole, restraint refers
to the belief that gratifying ones desires needs to be curbed and social norms
regulated.
Hofstedes work has been shown to have high validity and reliability, as
indicated by robust factor analyses results (Shane, 1992). Regarding reliability, Hofstede administered his questionnaire twice and used only those questions showing high correlation to derive his cultural value scales (Hofstede,
1980; Kogut & Singh, 1988; Shane, 1992). Furthermore, Hofstedes indices
have shown strong correlations with similar indices devised by other researchers (see, for example, Gordon, 1976 and Schwartz, 1994).
Since the initial studies by Hofstede, there have been six major replications of the survey for non-IBM employees (e.g., airline pilots, European
consumers, municipal civil servants, and so on), each covering 14 or more
nations originally studied by Hofstede (see de Mooij, 2004; Hoppe, 1990;
Merritt, 2000; Mouritzen, 2002; Shane, 1995; van Nimwegen, 2002). These
replications, conducted decades after Hofstedes original work, support
Hofstedes original findings and suggest that the findings are still relevant
today. Although the countries cultures may have changed since Hofstedes
original study, the replications indicate that if they changed, they did so
together, such that their relative positions remained intact (Hofstede, 2010).
98
Research Hypotheses
We tested three hypotheses regarding the relationship between Hofstedes
measures of cultural values and country scores on the GII. These hypotheses
are based on Shanes findings described earlier regarding the links between
cultural values and innovation.
Hypothesis 1: Power Distance will be negatively related to innovation
index scores on the GII.
Rinne et al.
99
Method
One set of research variables were taken from Hofstede et al. (2010) work on
cultural valuespower distance, individualism, and uncertainty avoidance.
Hofstedes measures of time orientation and masculinity were not used in
this research as they have not been previously linked to innovation, and we
could think of no strong theoretical argument for such a connection. The
other set of research variables was taken from the GII. By using the GII, we
draw the boundary of our measure of innovation at the national level.
Although businesses have globalized and many companies have corporations
in multiple countries, we believe it best to draw our boundary at the national
level as multinational corporations must abide by the laws and policies of the
country in which they operate and, in most cases, the majority of their
employees will be members of the national culture.
The aim of the statistical analysis was to uncover the relationships between
selected cultural dimensions (power distance, individualism, and uncertainty
avoidance), and the GII innovation scores (five input measures and two output measures). The two data sets were merged, which yielded 66 countries
that had scores for the Hofstede dimensions and the GII Inputs and Outputs
(see Table 1). These data were analyzed using a multivariate multiple linear
regression. The three cultural variables (Power Distance, Individualism, and
Uncertainty Avoidance) were used as predictors; the innovation scores
became the criteria variables. Bivariate correlations were then calculated to
test the strength and direction of the relationships of the Hofstede dimensions
and the GII scores. All raw data used in our analyses can be found in
appendix.
Results
The result of the multivariate multiple linear regression analysis indicated
that Power Distance and Individualism were reliably related to innovation
scores. Uncertainty Avoidance was not. The complete set of statistical results
for this analysis can be found in Table 2.
The bivariate correlations used to assess strength and direction of relationship showed that both GII Input and Output scores were individually related
100
Guatemala
Hungary
India
Indonesia
Ireland
Israel
Italy
Jamaica
Japan
Latvia
Lithuania
Malaysia
Malta
Mexico
Morocco
Netherlands
New Zealand
Norway
Pakistan
Panama
Peru
Philippines
Poland
Portugal
Romania
Russia
Singapore
Slovak Republic
Slovenia
South Africa
South Korea
Spain
Suriname
Sweden
Switzerland
Taiwan
Thailand
Trinidad & Tobago
Turkey
United Kingdom
Uruguay
USA
Venezuela
Vietnam
Discussion
This study explored the links among cultural values and national-level innovation ratings. Previous research has linked Hofstedes cultural values with
innovation outcomesspecifically trademarks and patents. This study
extends the relationship between Hofstedes cultural values and innovation
by looking at the relationship between Hofstedes dimensions and a more
comprehensive measure of national innovationthe GII. Our research offers
mixed support for Shanes (1992, 1993) findings.
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Rinne et al.
Table 2. Results of Multivariate Multiple Regression; Hofstede Dimensions as
Predictors and GII Input and Output as Criteria
Dimension
Power distance
Individualism
Uncertainty avoidance
Wilks
Fa
Partial 2
Observed power
.876
.773
.955
4.23
8.80
1.42
.019
.0004
.250
.124
.227
.045
.720
.964
.293
The results of our analysis indicate that the cultural dimension of power
distance is strongly and negatively related to innovation in line with Shanes
(1992, 1993) findings. High power distance nations may find it hard to
encourage their citizens to innovate as inequalities among people are not only
expected but desired and communication is limited between those of different strata (Hofstede, 2010). In high power distance nations subordinates in a
workplace expect to be told what to do, thus, opportunities to think for oneself and to use imagination are limited. By contrast, subordinates in low
power distance nations expect to be consulted and having imagination is
prized (Hofstede, 2010). In low power distance nations, it is believed that all
people should have equal rights and equal opportunities to succeed (Hofstede,
2010). In high power distance nations, it is believed that the powerful should
have special privileges and it is expected that not everyone will have an equal
opportunity to reach the highest level of advancement (Hofstede, 2010). With
limited opportunities for advancement, people in high power distance nations
in the lower strata may feel little motivation to be innovative as it is unlikely
they will be able to reap the rewards directly or even get their idea noticed by
those higher up in the social hierarchy.
It appears that the degree to which a culture reduces the barriers between
status levelsthat is, places a high value on egalitarianismis, in some
manner, connected to levels of innovation. This means that as a person in a
country feels able to approach, make suggestions to, and debate with someone in a higher status position, so does that countrys innovation score
increase. Thus, the increased amount of communication between the levels of
society and within business could allow for the easier flow and acceptability
of innovation ideas. It should also be noted that egalitarian societies emphasize meritocracy which can, in turn, put an emphasis on education (Lipset,
1990). A society in which people rise and fall based on merit is a society in
102
Rinne et al.
103
104
Appendix
Raw Data-Hofstedes Cultural Value Scores
and the GII Innovation Scores
Country
Argentina
Australia
Austria
Bangladesh
Belgium
Brazil
Bulgaria
Canada
Chile
China
Colombia
Costa Rica
Croatia
Czech Rep.
Denmark
Ecuador
El Salvador
Estonia
Finland
France
Germany
Greece
Guatemala
Hungary
India
Indonesia
Ireland
Israel
Italy
Jamaica
Japan
Latvia
Lithuania
GII score
GII inputs
GII outputs
PDI
IDV
UAI
2.91
4.28
4.21
2.52
4.31
2.97
3.26
4.55
3.35
3.32
2.76
3.35
3.28
3.77
4.72
2.43
2.76
3.76
4.66
4.20
4.32
3.28
2.72
3.54
3.10
2.95
4.27
4.11
3.47
2.95
4.50
3.29
3.44
3.44
5.04
5.00
2.88
4.95
3.62
3.79
5.32
4.18
3.64
3.50
3.90
3.81
4.45
5.46
2.85
3.61
4.71
5.42
4.94
5.09
3.91
3.41
4.19
3.82
3.62
4.95
4.79
3.95
3.78
5.01
4.03
4.22
2.39
3.52
3.42
2.16
3.68
2.32
2.74
3.78
2.52
2.99
2.03
2.80
2.76
3.10
3.99
2.00
1.91
2.81
3.90
3.45
3.56
2.65
2.02
2.90
2.37
2.27
3.59
3.42
2.98
2.13
3.98
2.56
2.67
49
36
11
80
65
69
70
39
63
80
67
35
73
57
18
78
66
40
33
68
35
60
95
46
77
78
28
13
50
45
54
44
42
46
90
55
20
76
38
30
80
23
20
13
15
33
58
74
8
19
60
63
71
67
35
6
80
48
14
70
54
76
39
46
70
60
86
51
70
60
94
76
85
48
86
30
80
86
80
74
23
67
94
60
59
86
65
112
101
82
40
48
35
81
75
13
92
63
65
(continued)
105
Rinne et al.
Appendix (continued)
Country
Malaysia
Malta
Mexico
Morocco
Netherlands
New
Zealand
Norway
Pakistan
Panama
Peru
Philippines
Poland
Portugal
Romania
Russia
Singapore
Slovak Rep.
Slovenia
South Africa
South Korea
Spain
Suriname
Sweden
Switzerland
Taiwan
Thailand
Trinidad &
Tob.
Turkey
United
Kingdom
Uruguay
USA
Venezuela
Vietnam
GII score
GII inputs
GII outputs
PDI
IDV
UAI
3.77
3.74
2.96
2.74
4.62
4.60
4.51
4.26
3.51
3.33
5.14
5.11
3.04
3.21
2.41
2.14
4.10
4.08
104
56
81
70
38
22
26
59
30
46
80
79
36
96
82
68
53
49
4.59
2.67
2.99
2.78
2.89
3.28
3.56
3.22
3.03
4.65
3.48
3.80
3.24
4.24
3.74
2.86
4.85
4.82
3.97
3.06
3.15
5.25
3.10
3.82
3.46
3.24
3.98
4.38
3.81
3.47
5.43
4.08
4.52
4.34
4.73
4.40
3.08
5.54
5.36
5.07
3.79
3.85
3.93
2.24
2.16
2.10
2.53
2.57
2.74
2.64
2.60
3.88
2.87
3.07
2.15
3.74
3.09
2.65
4.16
4.29
2.86
2.34
2.45
31
55
95
64
94
68
63
90
93
74
104
71
49
60
57
86
31
34
58
64
47
69
14
11
16
32
60
27
30
39
20
52
27
65
18
51
48
71
68
17
20
16
50
70
86
87
44
44
104
90
95
8
51
88
49
85
86
92
29
58
69
64
55
2.99
4.42
3.67
5.17
2.30
3.68
66
35
37
89
85
35
3.17
4.57
2.45
2.95
3.80
5.40
2.67
3.52
2.54
3.74
2.22
2.38
61
40
81
70
36
91
12
20
100
46
76
30
106
Funding
The author(s) disclosed receipt of the following financial support for the research,
authorship, and/or publication of this article: Funding for this research was provided
by the New Zealand Foundation for Research, Science and Technology under contract number LINX0801.
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Bios
Tiffany Rinne graduated from the University of Georgia with a PhD in anthropology
in 2008. She is now a research associate at Lincoln Universitys Agribusiness and
Economics Research Unit. Her research focus is cross-cultural differences in perceptions of innovation and technology.
G. Daniel Steel received his PhD in psychology from the University of British
Columbia, in 1994. He holds the position of senior lecturer in social psychology, in
the Faculty of Environment, Society, and Design, at Lincoln University. His current
research interests include human adaptation to extreme and unusual environments,
individual and community resilience to natural disasters, and national-level correlates
of innovation.
John Fairweather is a professor and full-time social science researcher attached to
Lincoln Universitys Agribusiness and Economics Research Unit. His work in
applied sociology primarily deals with describing, monitoring, and interpreting
changes in farming and rural society. Additional research activity focuses on research
methods, farmer resilience, causal mapping of farm systems, environmental orientations of farmers, farming styles, and user innovation.