Does national culture still matter? Evidence from European Union innovation rates

This study examines the effects of national culture on EU firm innovation performance. Using CIS data for 2010 and 2012 from 13 EU countries and Hosftede measures of culture, we apply multi-level modelling to examine the impact of four dimensions of culture on radical and incremental innovation performance. Results indicate that low power distance and muscularity are positively related to radical innovation, whereas organizations operating in national cultures that display an unequal distribution of power (higher power distance) are more prompt to low risk innovation. Firm innovative performance is stronger in collectivistic cultures compared to individualistic behaviours. This paper provides important implications for the organization of national environments that promote creativity and innovation.