The agricultural root of innovation in China

This paper presents evidence in favor of the hypothesis that agricultural legacy matters for shaping the equilibrium level of current innovations. The rice theory (Talhelm et al., 2014) provided a micro foundation for the proposition that people in rice cultivating areas are more inclined toward holistic thinking while wheat cultivating biases one toward analytical thinking. By taking advantages of homogeneity among Han Chinese, this paper proposes and tests the hypothesis that regions that grow rice (the suitability of land for rice production is used as a proxy) tend to inculcate values which promote weak innovations. Using multilevel (province, prefecture, county, and individual level) data within China, the results lend strong support to the proposed idea. Our findings are robust with alternative measures of rice cultivation, with alternative estimation strategies, and with the inclusion of various geographical, socioeconomic, and potentially confounding correlates. Acknowledgement : The authors thank Tang Zhong, Thomas Talhelm, and Ng Yew-Kwang for helpful discussions and comments, and Liu Meng and Aatishya Mohanty for providing competent research assistance. The usual disclaimers apply.