Essays on culture and innovations

• Main Author: Jayasekara Dinithi Nilanga
• Other Authors: James Ang
• Format: Thesis-Doctor of Philosophy
• Language: English
• Published: Nanyang Technological University 2021
• Subjects: Social sciences::Economic development
• Online Access: https://hdl.handle.net/10356/150750
• Institution: Nanyang Technological University

Globally, technology innovation and adoption have become central to economic progress. However, the role of culture and its influence on technology innovation and adoption still remains a black box. The thesis comprises three independent essays to uncover the dynamics of culture and its link to technology innovation and adoption using empirical and experimental approaches. There is a consensus that individualism/collectivism is one of the most important cultural dimensions to explain technological, income and productivity differences. Hence, the first two essays employ individualism and collectivism to explain cross-country variations in technology adoption and preferences. The literature argues that culture and institutions serve as complements or substitutes, depending on existing economic conditions. In the first chapter, we propose that deep-seated cultural differences and the strength of institutions jointly explain technology adoption behavior. We hypothesize that the adoption of novel technologies is more likely to occur in individualistic societies where risk-taking and the drive to be on the technology frontier is viewed as important. This behavior is reinforced by strong intellectual property rights (IPR), where the benefit of investments in new technology is likely to be fully internalized. Additionally, we hypothesize that strict IPR regimes are associated with more intense technology adoption, particularly in individualistic cultures, where individual behavior will take advantage of favorable institutions. Thus, we merge two hitherto separate strands of literature to bring further clarity to the ongoing debate on the effects of IPRs. Using cross-country analyses, we confirm that individualistic societies with strong IPR protection are more inclined to adopt new technologies and that they are mutually reinforcing. Chapter 2 examines how agricultural legacies have a lasting effect on cultural formations and their implications on individual preferences for modern technology. Cultural traits are formed by long-term exposure to specific types of crop cultivation, and it can be traced to the labor requirements of crops. Using historical labor intensities of crop production, we find societies that historically cultivated low labor-intensive crops, which demand individualistic behavior, have developed favorable attitudes towards technology. Conversely, societies that cultivated labor-intensive crops, which required intense cooperation and cohesiveness among farming communities, developed collectivist norms, which in turn led to their exhibiting a lower affinity to, and preference for, technology. Second-generation migrant data reveals that parental transmission of culture is an important channel for cultural transmission. Heterogenous effects by genders show that cultural transmissions are similar across men and women for labor-intensive crops because female participation in labor-intensive crop production is proportionately higher than low labor-intensive crops where cultural transmissions were stronger for men due to low female participation in crop production. Deviating from the first two chapters, chapter 3 utilizes empirical and experimental methodologies to explore the role of culture in promoting collaborative innovation, particularly individual-level behavioral mechanisms that drive such strategic decisions. Results from our empirical pre-study motivate the experimental approach. We test the cooperative commitment of individuals under different forms of generic frame-neutral cultural manipulation. In a controlled virtual lab, the cultural similarity between ingroup and outgroup members was modeled by beliefs, fate, rituals, and experiences. The experimental results show that knowledge sharing between ingroup members is higher than with outgroup members due to trust in cultural similarity. Additionally, cultural similarity increases its comparative advantage in the presence of weak IPR protection. Prosocial behavior is found to mediate the positive effects of cultural similarity on knowledge sharing decisions.