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Cultural distance, innovation capability, and corporate performance

Yuanlun Wang, Lingjuan Suo, Chunlei Li and Lele Wang

Finance Research Letters, 2025, vol. 77, issue C

Abstract: Using panel data from Chinese listed firms from 2008 to 2022, this study examines the relationship between cultural distance and corporate performance development. The findings suggest that a closer cultural distance enhances corporate performance. Reduced cultural distance can enhance a company's innovation capability and thus improve corporate performance. Corporate innovation roles differ between high-tech and nonhigh-tech enterprises, while cultural distance affects corporate performance with a threshold effect related to company size.

Keywords: Cultural distance; Innovation capability; Corporate performance; Company size (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003241

DOI: 10.1016/j.frl.2025.107060

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