Board culture and bank innovation: Evidence from China

This study mainly investigates the influence mechanism and effect of board culture on bank innovation. On the basis of unique cultural context of the East and state-owned bank attributes, we used the data of China's A-share listed banks from 2003 to 2018 to construct the cultural indicators of the board of directors, and used the dialect diversity index to measure the cultural diversity of the board of directors. Results show that the indicators of masculinity, degree of indulgence and cultural diversity are directly proportional to bank innovation. The value of power distance and uncertainty avoidance is inversely proportional to bank innovation. Further analysis found that the Oriental culture of the board of directors mainly affects bank innovation through channels such as human capital investment and efficiency and bank risk-taking. Our research results remain robust after controlling for endogenous issues and influencing factors such as Confucian culture.