Social Globalization and Design Innovation

While designs play a critical role in corporate innovation and business operations, the determinants of design innovation (i.e., new aesthetic or stylistic forms) are largely underexplored in the literature. Accumulating evidence suggests that openness to the exchange of ideas, the adoption of progressive policies, and the circulation of human capital play significant roles in driving regional innovative activities. In this study, we ask a variation of this question: Is there evidence that social globalization, i.e., “the spread of ideas, information, images and people” (Dreher et al., 2008, p. 43) – can drive the extent of national design innovation? We leverage a survey instrument reporting on globalization levels, the KOF Globalization Index, to measure national levels of social globalization. We find that national levels of social globalization predict design innovation, as measured by the number of annual design awards granted by the Industrie Forum (iF) over the period 1973-2015. To address the potential endogeneity in our analysis, we instrument for social globalization using a differences-in-differences approach and an instrumental variable approach. Our findings remain robust when we use U.S. design patents as an alternative measure for design innovation. We further show that personal contact could be the main underlying mechanism for social globalization to encourage design innovation