Ideological Imprints and Corporate Innovation: Evidence from China

Abstract

This study draws insights from the imprinting theory to investigate the impact of ideologically imprinted board chairs on corporate innovation. By examining a sample of Chinese listed manufacturing firms from 2003 to 2016, we find that firms with board chairs who get socialized during the hardline communist regime enhance corporate innovation. Further, we observe that such a positive effect on corporate innovation is more pronounced for firms where board chairs have more power on the board. However, their industry experience attenuates the documented positive relation. Overall, we provide empirical support to our arguments that intense adverse experiences such as the Cultural Revolution and Great Leap Forward Movements make top executives more sensitive to government demands, such as achieving annual patent targets, thus spurring corporate innovation. Our findings extend imprinting theory by elaborating that the intense political environment plays a crucial role in establishing an individual’s imprints which prevail for a long time irrespective of subsequent ideological changes. These findings provide fresh insights on the dynamics of ideological decay and persistence.

Publication Title

Journal of the Knowledge Economy

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