Several factors could in principle drive these differences is managerial quality across firms and then countries. Bloom and Van Reenem (2007) focus on four developed countries (the United States, Germany, the United Kingdom and France) and find evidence that, on average, poor management practices are more prevalent when product market competition is weak and/or when family-owned firms pass management control down to the eldest sons (primogeniture). More recently, Maloney and Sarrias (2017) revisit this issue but using a global sample of countries and focusing on the entire distribution of management quality, not only the mean, as a way to identify which factors are correlated with managerial practices across the convergence path (towards the frontier country, the United States). They find evidence that confirms Bloom and Van Reenem’s result on the importance of ownership as a correlate to explain variation of managerial quality, particularly among less well-managed countries. As a new result, the authors find that human capital of the managers is a key factor driving differences in managerial quality across the whole distribution, particularly among better-managed countries. Overall, these two empirical regularities suggest there might be several distinct dynamics at work across the managerial quality convergence process. In this regard, evidence presented by Maloney and Sarrias (2017) shows that China has substantial space to improve in these two fronts: among Chinese surveyed firms used in their analysis, 54 percent have managers with a degree, against 86.3 percent in the United States and 96.2 percent in Japan; in addition, only 25 percent of the Chinese surveyed firms have a diffused ownership structure (with many shareholders) against 45.7 percent in the United States and 53 percent in Japan.

# **_4. Concluding remarks_**

The current paper followed the comprehensive approach about national innovation systems presented at Cirera and Maloney (2017) and shed light on key innovation patterns and constraints within a selected group of developing East Asian countries (Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, the Philippines, Thailand and Vietnam). The paper presented two sets of empirical exercises drawing from different data sets, at the country and firm levels. Some illustrative results are noteworthy.

_First_ , a simple country benchmarking exercise, drawing from the GII data set, was conducted to identify which innovation enabling factors matter the most to explain innovation output performance across countries. The following developing East Asian countries were covered in the data set: Cambodia, China, Indonesia, Malaysia, the Philippines, Thailand and Vietnam. Results suggest that horizontal factors that in principle impact overall firm performance and accumulation of any type of capital (not only knowledge capital) also matter as determinants of innovation performance: almost 35 percent of variation of innovation output performance across all countries covered by the GII data set is explained by the _Institutions_ , _Infrastructure_ and _Market Sophistication_ pillars. Among these enabling factors, the one where the developing East Asian countries covered by the data set mostly underperform is _Institutions_ ; precisely in terms of regulatory environment and business environment. These results reinforce the idea presented in Cirera and Maloney (2017) that complementary factors of the business environment - that go beyond specific barriers to innovation - are critical to improve the performance and returns to innovation. Therefore, boosting the regulatory environment and business environment is key to improve the innovation output performance of this selected set of countries.

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