Clan culture and corporate innovation

Chang Li, Chu Wang and Chang Xue

Pacific-Basin Finance Journal, 2024, vol. 83, issue C

Abstract: Cultural traditions have consistently shaped people's values and beliefs, thereby influencing various aspects of society, including the economy. This paper examines the impact of kinship-based clans, an exceptionally significant social organization in premodern China, on contemporary corporate innovation. By utilizing the number of genealogies as a proxy for local clan strength, we find compelling evidence that firms in prefectures with a more pronounced clan culture produce greater innovative outputs. Delving into potential channels, our analysis demonstrates that clans can act as informal institutional arrangements, offer managerial incentives, and ease financial constraints. Moreover, the kinship-based clan background of CEOs spurs innovation activities.

Keywords: Clans; Culture; Innovation; China (search for similar items in EconPapers)
JEL-codes: D22 O30 Z10 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:83:y:2024:i:c:s0927538x23003001

DOI: 10.1016/j.pacfin.2023.102229

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