| Chapter 1: | Introduction |
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Before running the regressions, however, I conduct a factor analysis to identify the independent, dependent, and the intervening variables that are used in the regressions.
I design a two-step regression model to test the hypothesis and apply the model to each of the dependent, independent, and intervening variables. The first regression tests the significance of the relationship between diversity and innovativeness without the right context in place. It establishes whether there is a relationship between diversity and innovativeness. The second regression is the actual test of the hypothesis. It tests the significance of the relationship between diversity and innovativeness as a function of the right context.
The 30 OECD countries are used as a sample for the analysis. The decision to use only the OECD countries is deliberate and is dictated by the theoretical assumptions of the research and by the availability of data. I am aware of the fact that such a small sample size for a cross-country regression weakens the validity of the results and constitutes a main limitation of the research. However, the goal of the study is not to provide a robust proof but to make a preliminary check whether the hypothesis is plausible. For that goal, the limited sample is acceptable. Since there has not yet been an attempt to test such a hypothesis, this study makes a first step in that direction. It has to be left to future research to assess whether the hypothesis holds true when the sample size is enlarged and more countries are included.
Structure of Research
The research consists of five parts followed by the conclusions. The first part introduces the main problem that is tackled by the research. It describes the underlying idea, the importance, the approach, and the structure of the research.
The second part includes a brief literature review of the topic. The third part contains the theoretical foundations of the research. The first subsection of the third part describes the idea of innovation.