Chinese Traditional Culture And Corporate Innovation

Innovation is not only an important path for a firm to gain competitiveness and enhance its value,but also a key driving force for economic growth.At present,the implementation of the Innovation-driven Development Strategy has become a national strategic choice under the new normal of China’s economic development.Due to the pivotal role that innovation plays in the development of the firm,economy and nation,entrepreneurs and policymakers are actively exploring how to effectively promote the innovation of enterprises.This issue has also attracted attentions in academia,and scholars have discussed about the factors affecting innovation from different angles.Existing research shows that enterprise innovation is affected by individual and company characteristics,as well as by formal institutional factors such as the level of legal and financial development,the protection of intellectual property and so on.Although there are more and more literatures on enterprise innovation published in domestic and foreign top journals over the recent decades,individual characteristics and formal institutional factors are not enough to explain why the innovation level of enterprises is different in areas with the same institutional background.There must be significant factors that affect enterprise innovation remaining unknown.This article attempts to examine the impact of culture,which is a kind of informal institutional factors,on innovation in the single-country context,showing an unchanged formal institutional background.The purpose of this paper is to develop the range of the factors influencing the innovation of enterprises,and to provide direct evidence of culture and enterprise innovation based on a particular country reserving a rich cultural heritage.Corporations are founded and managed by individuals with a specific cultural background.In return,the cultural background of founders would also affect business management.Corporations are always operated in a cultural atmosphere,thus inevitably interacting with the environment through local executives and employees,customers and suppliers.Therefore,culture is the key factor that influences the behavior and result of an enterprise.This paper selects three specific types of culture that have a deep impact on the society of China,including marriage culture,clan culture and dialect culture.Based on the analysis of the ownership allocation of husband and wife,the family genealogical density and the number of regional dialects,this article uses data of A-share listed companies to examine the impact of culture on firm innovation,finding the following main conclusions:First of all,the marriage culture affects the relative position of the couple within a family.Although a family is the basic unit of decision-making entity,the influence of the marriage culture is beyond the scope of family.Woman’s status in a family affects her participation in family firm’s equity arrangement,further influencing the role of woman in family business.This paper finds that when the entrepreneur’s wife owns the share of family firm,the natural conservative tendency of a woman will affect the decision-making of enterprise,resulting in a more conservative manner and reducing innovation which is a high-risk behavior;and husband,who is willing to register the stock of a firm under the name of his wife,are also more likely to come from areas where male chauvinism is weak,making their decisions relatively conservative and showing significantly less innovative inputs.Secondly,for thousands of years,China has relied on clans as a platform for social interaction,forming a unique clan culture that has a profound impact in society and economy.The collectivism in the clan culture emphasizes the idea that individuals should be consistent with the collective and restricts individual expression of novelty,leading to unfavorable enhance of the society’s ability of innovation.At the same time,the short radius of trust in the clan culture is not conducive to the diversification of talent and shareholders,which can also inhibit the company’s ability to innovate.This article finds that in the area where the clan culture is thicker,the lower the level of innovation output for the local private listed companies.The clan culture makes the company’s senior management structure more homogeneity and restrains the company’s positive awareness of market competition,all of which lead to a lack of innovation for corporations locating in areas with thicker clan culture Incentive.Thirdly,China has vast territories,different places has different natural and geographical conditions,which formed a rich and diverse regional culture that provided enterprises with a good environment for innovation,as innovative ideas and practices are largely derived from the interaction of different individuals’ talents,ideas,insights and experiences.This paper finds that the more diverse dialects in a region,the more the enterprises’ invention patents are produced,and the region which has more inclusive culture,people of multicultural backgrounds are more accessible,thus,diverse cultures can contribute to business innovation.At the same time,population mobility can increase the cultural diversity and strengthen the positive impact of cultural diversity on entrepreneurship innovation.This shows that the diversified knowledge and cross-cultural exchanges brought by cultural diversity can help stimulate the emergence of innovative ideas,make it easier for enterprises to form creative thinking and break through existing technologies,thereby enhancing their innovative capabilities.Compared with the existing literature,the main contributions of this paper are:First of all,this article expands the research literature on culture and economy.At the present,most of the studies on culture and economics or finance are conducted on the basis of transnational research.However,there are relatively few studies on the role of Chinese culture in economic and enterprise development,and there is not enough concern about the cultural factors in enterprise innovation.China has a great variety of cultures,which makes China a natural and ideal scene for studying culture and economy.Under the unified system background,this article studies whether China’s marriage culture and the clan culture and dialect culture in different regions are the important factors that affect the innovation of the enterprises.Which extends the study of culture and economy to the field of enterprise innovation.This study can also avoid the endogeneity issue of transnational research in culture and economy,and provide direct evidence from developing countries for cultural and economic research.By examining the cultural factors behind the obvious differences in the level of innovation in various parts of China,we can also better understand the non-institutional reasons behind the uneven economic development in various parts of China so as to formulate economic policies in line with the Chinese culture and the regional development policies,thus provide theoretical and empirical reference for cultural system reform.Secondly,this article expands on the research literature related to enterprise innovation.The individual and formal institutional factors that influence innovation have been extensively studied,but the cultural influence in exploring innovation has just begun.In the literatures examining culture and enterprise innovation,the measure of culture is relatively indirect.In this paper,we use the tangible cultural carrier to measure the specific culture directly,and examine the impact of three different types of culture on business innovation,which can eliminate the measurement error more cleanly.The results of the study can also provide strong evidence for the academic community to understand the marital cultural factors in the process of enterprise innovation decision-making and the external cultural atmosphere on which innovative output relies.Thirdly,the research in this article will help the academic community understand the impact of Chinese traditional culture on economic development more objectively.In the 40 years after the reform and opening up,China’s economy developed rapidly.Some documents think that there is still a big gap in the formal system between China and the Western countries.Therefore,culture has played an important role in the rapid economic growth.However,if we only discuss the positive impact of Chinese culture on the economy,it is obviously impossible to explain the objective fact that the gap between modern China and the West is widening.The empirical study shows that some factors in the Chinese cultural tradition have a negative impact on the innovation of enterprises.This paper through empirical research found that some factors in the Chinese cultural tradition have a negative impact on the innovation of enterprises.The results of this empirical study provide new evidence for a more comprehensive and objective understanding of the academic community and the evaluation of the impact of Chinese culture on economic development.