Corporate Culture and Innovation: A Tale from an Emerging Market

Yaopeng Wang, Hisham Farag, Wasim Ahmad

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We examine the influence of corporate culture on innovation using a unique set of data from Chinese listed companies over the period 2008–2017. Using the competing value framework, we quantify corporate culture using textual analysis of financial statements. We find a positive and significant impact of a creation culture on innovation measured by both patent applications and citations, as well as innovation efficiency. We address endogeneity concerns and conduct a battery of robustness tests, including alternative proxies for both corporate innovation and culture, and conclude that variations in culture have a significant impact on firm‐level innovation. We also show that a strong creation culture is more likely to spur innovation for firms in more competitive product markets and firms that are subject to higher managerial career concerns. We provide empirical evidence that corporate culture is an important driver in enhancing innovation. Our results have clear implications for directors and shareholders.
Original languageEnglish
Pages (from-to)1121-1140
JournalBritish Journal of Management
Issue number4
Early online date30 Mar 2021
Publication statusE-pub ahead of print - 30 Mar 2021

ASJC Scopus subject areas

  • General Business,Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation


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