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Too much teamwork? The effect of corporate collaboration culture on breakthrough innovation

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  • Chen, Weimin
  • Luo, Yalin
  • Rao, Miao
  • Zhang, Pengdong

Abstract

This paper investigates the impact of corporate collaboration culture on firms’ breakthrough innovation. Utilizing MD&A texts from the annual reports of Chinese A-share listed companies, we develop a measure for collaboration culture and examine its influence on firms’ breakthrough innovation outputs. Our findings indicate that collaboration culture inhibits breakthrough innovation through two primary mechanisms: 1) it fosters innovation path dependence, whereby firms prioritize refining existing technologies over exploring new avenues, as collaboration culture promotes collectivism while discouraging individual creativity; 2) it restricts knowledge spillovers between firms due to internal collaboration substituting for external collaborative efforts. The adverse effects are particularly pronounced among private enterprises, within competitive industries, in regions characterized by lower levels of industrial clustering, and among firms with limited digital transformation capabilities.

Suggested Citation

  • Chen, Weimin & Luo, Yalin & Rao, Miao & Zhang, Pengdong, 2025. "Too much teamwork? The effect of corporate collaboration culture on breakthrough innovation," Finance Research Letters, Elsevier, vol. 78(C).
    • Handle: RePEc:eee:finlet:v:78:y:2025:i:c:s1544612325001771
    DOI: 10.1016/j.frl.2025.106913
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    Cited by:

    1. Chen, Sicen & Lin, Shuping & Luo, Yalin & Zhang, Pengdong, 2025. "How do entrepreneurial directors shape financial reporting quality in non-profit organizations?," International Review of Economics & Finance, Elsevier, vol. 99(C).
    2. Zheng, Yulan & Wu, Yifan & Zhang, Yaoli & Meng, Xiaoyu & Zhang, Pengdong, 2025. "Greening the future: How green manufacturing shapes corporate environmental and ESG success," International Review of Financial Analysis, Elsevier, vol. 100(C).
    3. Long, Houyin & Lai, Guansen & Jiang, Jiaoliang & Liu, Ruonan, 2025. "The impact of top-down amplification of economic growth targets on CSR performance-evidence from China," International Review of Financial Analysis, Elsevier, vol. 101(C).
    4. Liu, Xin & Liu, Chenlan & Duan, Mingzhe & Chen, Sicen, 2025. "Cash management amid HFCAA-Induced data breach risks: A comparative analysis of reactive vs. proactive responses in Chinese firms," International Review of Economics & Finance, Elsevier, vol. 99(C).

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