(Purpose) This study introduces two novel indices—the Adaptive Regulatory Coherence Index (ARCI) and the Strategic Regulatory Congruence Index (SRCI)—to elucidate how government regulation fosters innovation amidst market uncertainty. By conceptua...
(Purpose) This study introduces two novel indices—the Adaptive Regulatory Coherence Index (ARCI) and the Strategic Regulatory Congruence Index (SRCI)—to elucidate how government regulation fosters innovation amidst market uncertainty. By conceptualizing the coherence and congruence between regulatory and innovation support policies, this research establishes a theoretical framework and develops empirical metrics for evaluating policy effectiveness.
(Design/Methodology/Approach) The ARCI operationalizes the hypothesis that the efficacy of policy instruments is maximized when regulation and government support function complementarily. To refine this measurement, the SRCI is proposed to assess 'strategic fit' with higher precision. Both indices are theoretically grounded in the 'Fit' concept of econometrics and 'Profile Deviation Analysis' from statistical theory.
(Findings) The ARCI is formulated with the synergy of regulation and support as the numerator and market uncertainty as the denominator. However, recognizing the volatility of ARCI when uncertainty approaches zero, the SRCI applies Venkatraman’s (1989) profile deviation method. By calculating the Euclidean distance between an individual firm’s state and the industry’s 'optimal policy coherence profile,' and weighting this distance with uncertainty, the SRCI enhances both statistical stability and interpretability.
(Research Implications or Originality) Unlike previous studies analyzing policies in isolation, this research provides tools to empirically validate 'Policy Mix' complementarity. As the OECD’s Transformative STI Outlook (2025) calls for managing synergies through concrete indicators, this study presents a viable alternative for measuring policy coherence in the digital era.