How beliefs influence behaviour: Confucianism and innovation in China

Previous studies have analysed how religious beliefs may affect economic activity. We extend this literature by examining how Confucianism is linked to innovation activity at the firm level in China. We analyse the relationship between Confucianism and several proxies for input and outputs of innova...

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Bibliographic Details
Published in:Economics of transition and institutional change 2021-07, Vol.29 (3), p.501-525
Main Authors: Feng, Xunan, Jin, Zhi, Johansson, Anders C.
Format: Article
Language:English
Subjects:
Beliefs
China
Confucianism
Economic activity
innovation
Innovations
Ownership
R&D
Religious beliefs
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Summary:Previous studies have analysed how religious beliefs may affect economic activity. We extend this literature by examining how Confucianism is linked to innovation activity at the firm level in China. We analyse the relationship between Confucianism and several proxies for input and outputs of innovation activities. Our results show that Confucianism is significantly related to lower levels of innovation activity regardless of which measure for firm‐level innovation we use. We also find that the nature of ultimate ownership influences this relationship, with innovation among state‐controlled firms being significantly more affected by Confucianism. This study thus adds to the understanding of how traditional belief systems influence behaviour among economic actors.
ISSN:2577-6975
2577-6983
DOI:10.1111/ecot.12277