Abstract

While there is abundant research on innovations, we know little about why and when the commercialization of highly contested innovations, such as genetically modified (GM) crops, is approved by governments. In this paper, we argue that governments' decision to approve the commercialization of GM crops is influenced by heuristics based on the decisions of other governments with which they have greater trade, the gap between country performance and aspiration, and governments' prior decisions on GM crops field trials. We further propose that the effect of these heuristics weakens when the government operates in countries with higher governance quality. Using data on approval of GM crop commercialization between 1991 and 2016, we found support for these arguments and suggest the joint effects of heuristics based on the decisions of trade partners and governance quality on governments' approval of GM crop commercialization.