National innovation systems and corporate intangible investment as a driver of sustainable development: A cross-country study

Abstract

We investigate the impact of national innovation systems (NIS) on corporate intangible investment, which is a crucial factor in economic growth and sustainable development. Using a comprehensive international sample of 25,974 firms from 77 countries during 2011–2019, we find a positive impact of NIS on corporate intangible investment and corporate intangible value growth. Our results suggest that governments can stimulate growth in intangible assets at the firm level by fostering innovation at the national level. The impact persists in different components of NIS, including human capital and research, infrastructure, technology and creative outputs, and business and market sophistication. Further analysis suggests that the impact is more pronounced in small firms, firms with high growth, and firms depending more on intangibles. At the macro level, the effect of NIS seems to be largely stronger in developed countries, weakened under income inequality while being supported by a younger workforce and strong rule of law. Our findings have practical implications for policymakers regarding how national innovation forms corporate intangible asset growth and contributes to sustainable economic development.