Does Confucian culture influence corporate R&amp;D investment? Evidence from Chinese private firms

Yan, Yunfei; Xu, Xingkai; Lai, Jieji

doi:10.1016/j.frl.2020.101719

Cited by 70 publications

(23 citation statements)

References 27 publications

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“…Du (2015, 2016) and L. Chen, Jin, Ma, and Xu (2019) use Confucianism centers (temples) as a proxy variable for Confucian culture; accordingly, the present study selects the number of recorded domestic Confucianism schools and centers in each province, city, autonomous region and municipality as a proxy variable to measure the Confucian culture atmosphere of the external environments in which households are located 3 . The essential Confucian culture feature is to spread its values and ideology through education, and it focusses on forming a consistent humanistic environment (Yan, Xu, & Lai, 2020; Provis, 2020). Since the Han Dynasty, school education had gradually become the primary way to spread Confucianism.…”

Section: Robustness Checksmentioning

confidence: 99%

The effect of Confucian culture on household risky asset holdings: Using categorical principal component analysis

Kong

Dadilabang

et al. 2021

Int. J Fin Econ

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Confucianism, as an informal system, influences the risk preferences of households and, therefore, affects households' investment behaviours. This study investigates the effects of Confucian culture on household risky assets by using data from the 2016 China Family Panel Studies and using categorical principal component analysis. The empirical results reveal that Confucian culture is negatively correlated with risky assets held by households. Specifically, households more influenced by Confucian culture demonstrate a low probability of participating in the risky financial market and a decreased proportion of risky asset holdings. Further research indicates that this negative correlation is diminished in areas with high levels of social trust. Furthermore, foreign culture impact drives households to enter financial markets. Therefore, the Chinese government must thoroughly consider the potential effects of culture when formulating policies, utilize Confucian culture's adaptation to modern society and promote the healthy development of the financial market. This study augments the household finance theory from the perspective of informal systems and contributes to the research on 'culture and finance.'

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Section: Robustness Checksmentioning

confidence: 99%

The effect of Confucian culture on household risky asset holdings: Using categorical principal component analysis

Kong

Dadilabang

et al. 2021

Int. J Fin Econ

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show abstract

“…With regard to formal institutions, country level corporate governance, corporate transparency, rule of law [8], regulatory quality, government effectiveness and political stability are all important determinants of R&D investment (Acharya and Subramanian, 2009;Xiao, 2013;Seitz and Watzinger, 2017;Brown et al, 2017;Brown and Martinsson, 2018;Alam et al, 2019Alam et al, , 2020. Regarding informal institutions, culture, language and competition from unregistered firms are all important determinants of R&D investment (Lewellyn and Bao, 2015;P erez et al, 2018, 2019Chi et al, 2020;Yan et al, 2020).…”

Section: Theory and Hypothesesmentioning

confidence: 99%

The effect of institutions on R&D investment: the case of four mediterranean euro area states

Vlachos

2022

JAAR

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PurposeThis study investigates the impact of institutional factors on firms investing in R&D.Design/methodology/approachThe study uses data from the World Bank's Enterprise Surveys for the Republic of Cyprus, Greece, Italy and Portugal. A model with institutional factors as explanatory variables and firm performance factors as control variables is estimated with weighted least squares heteroscedasticity corrected regression. The reverse causality problem is addressed by using a two-stage least squares regression approach.FindingsThe findings indicate that institutional quality has a significant influence on firms' R&D expenditure. The results have several implications in relation to findings of previous research.Research limitations/implicationsThe inclusion of more countries that were affected by the European economic crisis will probably give more insights about the effect of institutional factors on R&D.Practical implicationsPolicy makers have to address short-comings in institutional quality, particularly in terms of the labor regulation burden. Policy makers should prioritize anti-corruption measures to foster an environment that would attract more R&D in the Republic of Cyprus and Greece.Originality/valueThis study contributes to the growing body of literature investigating the impact of institutional factors on R&D. It focuses on four developed European countries that bore the brunt of the European economic crisis and have to implement their recovery and resilience plans successfully, in order to recover from the effects of the COVID-19 pandemic on their economic activity.

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“…They argue that national culture reflects behavioral norms and attitudes of decision makers and therefore should affect the R&D investment decisions. Similarly, Yan et al (forthcoming) evaluated the culture and R&D investment nexus using Confucian culture – a dominant Chinese cultural trait. Similar to culture, language may also affect cognition and decision making (Chi et al , 2020) and eventually affect R&D investments.…”

Section: Editorial Reportmentioning

confidence: 99%

Guest editorial: Institutions and R&D investment: prospects and challenges

Uddin

Alam

Yazdifar

2022

JAAR

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Does Confucian culture influence corporate R&D investment? Evidence from Chinese private firms

Cited by 70 publications

References 27 publications

The effect of Confucian culture on household risky asset holdings: Using categorical principal component analysis

The effect of Confucian culture on household risky asset holdings: Using categorical principal component analysis

The effect of institutions on R&D investment: the case of four mediterranean euro area states

Guest editorial: Institutions and R&D investment: prospects and challenges

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