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Cultural distance, innovation capability, and corporate performance

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  • Wang, Yuanlun
  • Suo, Lingjuan
  • Li, Chunlei
  • Wang, Lele

Abstract

Using panel data from Chinese listed firms from 2008 to 2022, this study examines the relationship between cultural distance and corporate performance development. The findings suggest that a closer cultural distance enhances corporate performance. Reduced cultural distance can enhance a company's innovation capability and thus improve corporate performance. Corporate innovation roles differ between high-tech and nonhigh-tech enterprises, while cultural distance affects corporate performance with a threshold effect related to company size.

Suggested Citation

  • Wang, Yuanlun & Suo, Lingjuan & Li, Chunlei & Wang, Lele, 2025. "Cultural distance, innovation capability, and corporate performance," Finance Research Letters, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003241
    DOI: 10.1016/j.frl.2025.107060
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    References listed on IDEAS

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