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The role of culture in driving innovation: A quasi-natural experiment from China

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  • Gong, Maoyu
  • Liu, Xuan

Abstract

Culture constitutes the fundamental impetus for innovation. We utilize Chinese county-level data and employ the pilot demonstration-city policy on culture-technology integration as a quasi-natural experiment. We assess the policy’s effects on innovation and clarify its underlying mechanisms using the difference-in-differences model. Our results reveal that: firstly, culture-technology integration significantly spurs innovation, both economically and statistically significantly. Specifically, the average innovation output in the regions where policies were implemented increased by 26 %. Secondly, the policy’s innovation effects are significantly heterogeneous in terms of innovation sources, innovation types, and cultural types. Finally, the primary channels through which the integration policy drives innovation at both the macro and micro levels are increased R&D investment, the emergence of new firms, and reduced operating costs.

Suggested Citation

  • Gong, Maoyu & Liu, Xuan, 2026. "The role of culture in driving innovation: A quasi-natural experiment from China," Research in International Business and Finance, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:riibaf:v:83:y:2026:i:c:s0275531926000164
    DOI: 10.1016/j.ribaf.2026.103289
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