Examining the Effects of Cultural Tightness-Looseness and Government-led Innovation Initiatives on Regional Innovation Outcomes in China

Abstract

In this study, we investigated the influence of cultural tightness-looseness on general, incremental, and radical innovation in China over 15 years, with a focus on the interaction between cultural factors and government initiatives, particularly the "Mass Entrepreneurship and Innovation" campaign initiated in September 2014. Using a longitudinal dataset of annual government reports from 31 provinces between 2007 and 2021, we found that cultural tightness and government innovation initiatives positively impacted general and incremental innovation but not radical innovation. The nationwide campaign modified the relationship between tightness/looseness and innovation initiatives, with tightness' negative moderating effect diminishing after the campaign. Additionally, innovation initiatives significantly affected all innovation types only after the campaign, while the interaction between looseness and innovation initiatives changed from positive to negative. These results emphasize the importance of examining the interplay between cultural factors and government policies in fostering different forms of innovation and highlight the influence of nationwide campaigns on local government policies for driving innovation outcomes.