National Culture and Corporate Innovation

43 Pages Posted: 15 Aug 2014 Last revised: 22 Apr 2017

See all articles by Yangyang Chen

Yangyang Chen

Hong Kong Polytechnic University - Faculty of Business

Edward Podolski

Deakin University; Financial Research Network (FIRN)

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area

Date Written: April 21, 2017

Abstract

In this paper, we examine how cultural norms along the dimensions of individualism-collectivism and uncertainty-avoidance affect corporate innovation. Using a comprehensive sample across 41 countries, we find that firms located in countries with higher levels of individualism generate more and higher impact patents, and are more efficient in converting R&D into innovative output. In contrast, we find that firms located in countries with higher levels of uncertainty-avoidance produce fewer and less significant patents, and are less efficient with their R&D expenditure. Taken together, our findings show that national culture plays an important role in influencing corporate innovation around the world.

Keywords: National culture; Corporate innovation; Individualism; Uncertainty-avoidance

JEL Classification: G15, G31, O31

Suggested Citation

Chen, Yangyang and Podolski, Edward and Veeraraghavan, Madhu, National Culture and Corporate Innovation (April 21, 2017). Pacific-Basin Finance Journal, Forthcoming. Available at SSRN: https://ssrn.com/abstract=2480320 or http://dx.doi.org/10.2139/ssrn.2480320

Yangyang Chen

Hong Kong Polytechnic University - Faculty of Business ( email )

9/F, Li Ka Shing Tower
The Hong Kong Polytechnic University
Hong Kong, Hung Hom, Kowloon M923
China

Edward Podolski (Contact Author)

Deakin University ( email )

221 Burwood Highway
Burwood, Victoria 3125
Australia

Financial Research Network (FIRN) ( email )

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

Madhu Veeraraghavan

T.A. PAI Management Institute, Finance Area ( email )

Bangalore
Manipal, Karnataka 576104
India
+91-820-2701030 (Phone)

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