We study the design of institutions as a framework for regulating innovative activity in the private sector given the informational constraints faced by the social planner. Innovation in the private sector by financial institutions and manufacturing firms imposes important positive and negative...

Technological innovation is critical to a country's economic development and a firm's long-term success. This article reviews the recent literature that links institutions and innovation. Specifically, we focus on five aspects of the linkage. First, we discuss the literature that explores how...