Do Radical-Right Governments Suppress Innovation?

Sammanfattning

An extensive body of research has shown that innovation is heavily influenced by the political environment in which firms operate, shaping the conditions under which it emerges and persists. Amid the surge of support for radical-right parties in Europe, this thesis examines whether radical-right government participation is associated with a decrease in innovation activity and output. This participation is measured by the presence of at least one radical-right party in the governing coalition. Unlike mainstream parties, radical-right parties are more strongly defined by cultural and political positions, including restrictive immigration preferences, weaker trust in scientific institutions, and nationalist attitudes toward international collaboration. To test this relationship, we use panel data from 27 European OECD countries between 2001 and 2022, combining government composition data with party ideology scores from the Chapel Hill Expert Survey. To capture both innovation activity and realised innovation output, we use patents filed and trademark applications alongside granted patents and registered trademarks. The empirical strategy is a panel OLS specification with country and year fixed effects, standard errors clustered at the country level, and a standard set of macroeconomic, demographic, and innovation-system controls. Identification rests on within-country variation between radical-right and non-radical-right years rather than on cross-country comparisons. The results show that radical-right government participation is not significantly associated with realised innovation output but is negatively associated with innovation activity. This may reflect that filings respond to current conditions, while grants and registrations follow longer approval processes and may reflect earlier political environments. While the results do not establish causality, they point to a negative association between radical-right government participation and innovation activity.