Summary:
Zingales (2015) believes that financial research is undergoing a cultural revolution. Firms are the best experimental objects for evaluating the influence of culture on the individual entity, not only because a firm is able to reshape its cultural orientation, allowing its cultural characteristics to vary over time, but also because the large number of firms constitutes a sufficient sample size for research. These advantages suggest that corporate culture will be the main focus of research on this cultural revolution. Corporate culture, described as the values and norms defined and shaped by firms for their own employees, is an important strategic asset. The main purpose of corporate culture is to drive employees to form behavior patterns that are beneficial to their firm. Among the vast range of characteristics of corporate culture, collaboration is highly related to innovation, mainly because firms that emphasize collaboration cooperate more willingly with external research institutes in R&D activities. Meanwhile, an emphasis on collaboration within a firm not only helps to establish information sharing among employees and promote private information sharing, but also improves cohesion and teamwork among R&D staff. However, there are also some obvious negative effects of a collaboration culture. Both sides have the incentive to be free riders. Furthermore, information sharing during collaboration may lead to technology leakages. A collaborative culture also represents a collective tendency to emphasize teamwork, which may leave little space for the development of an individual's unique talents. Moreover, as employee turnover is limited in such firms, employees gradually lose their sense of career uncertainty and slacken their work, which negatively affects innovation.The goal of this paper is to apply textual analysis to further our understanding of the effect of a collaboration culture on firm innovation. We establish a word bag of synonyms of “collaboration” and create two indicators to measure a firm's collaboration culture. One indicator is based on whether collaboration or its synonyms are included in the vision, mission, or core values presented on the firm's website; the other is defined as the frequency of occurrence of the word collaboration and its synonyms divided by the total number of words in the MD&A sections of the annual report. We use these two indicators as proxies to measure the collaboration culture of listed firms and investigate its impact on corporate innovation. We find that a collaboration culture is positively correlated with the firm's innovation output and innovation efficiency. This result remains robust even after adding further control variables, selecting rice acreage as an instrumental variable, and performing a PSM-DID analysis with the abnormal replacement of the CEO. Furthermore, our results suggest that improved cohesion between employees and the promotion of collaboration between university and industry are two dominant mechanisms that enhance corporate innovation. We also find this positive effect to be more pronounced in industries with a higher degree of competition and in regions with higher social trust or a greater concentration of interconnected industries. Our paper makes two contributions to the literature. First, it enriches the limited literature on corporate culture by measuring the collaboration culture of each firm through textual analysis and then exploring its impact on corporate innovation. Our paper not only provides a new methodology for assessing corporate culture among large samples, but also reveals the mechanisms by which a collaboration culture affects corporate innovation. Thus, it sheds light on the importance of cultural capital and provides empirical evidence for the national strategy of building a culturally strong country. Second, our paper contributes to the literature on corporate innovation. Although both national and regional factors have been proven to influence innovation, along with micro-level factors such as corporate governance and litigation risk, we know little about how corporate culture affects innovation. Our findings not only enrich the literature by focusing on this relationship, but also provide practical references for the construction of firms and the development of a corporate culture that accords with innovation.
潘健平, 潘越, 马奕涵. 以“合”为贵？合作文化与企业创新[J]. 金融研究, 2019, 463(1): 148-167.
PAN Jianping , PAN Yue , MA Yihan. Is Cooperation Important？ Collaboration Culture and Innovation. Journal of Financial Research, 2019, 463(1): 148-167.
Fiordelisi, F.and O.Ricci 2014. “Corporate Culture and CEO Turnover”, Journal of Corporate Finance, 28: 66～82.
[8]
Focarelli, D. and A. F.Pozzolo 2008. “Cross-Border M&As in the Financial Sector: Is banking Different From Insurance？”. Journal of Banking & Finance, 32(1): 15～29.
[9]
Gormley, T. A. and D. A.Matsa 2013. “Common Errors: How to (and not to) Control For Unobserved Heterogeneity”, Review of Financial Studies, 27(2): 617～661.
[10]
Graham, J. R., C. R.Harvey, J.Popadak and S.Rajgopal 2016. “Corporate Culture: Evidence From the Field”, Duke University Working Paper.
[11]
Guiso, L., P.Sapienza and L.Zingales 2004. “The Role of Social Capital in Financial Development”, American Economic Review, 94(3): 526～556.
[12]
Guiso, L., P.Sapienza and L.Zingales 2015. “The Value of Corporate Culture”, Journal of Financial Economics, 117(1): 60～76.
[13]
Hilary, G. and K.W.Hui 2009 “Does Religion Matter in Corporate Decision Making in America？”, Journal of Financial Economics, 93(3): 455～473.
[14]
Hofstede, G. H. 2001. “Culture's Consequences: Comparing Values, Behaviors, Institutions and Organizations Across Nations”, Sage.
[15]
Hsu, P. H., X.Tian and Y.Xu 2014. “Financial Development and Innovation: Cross-Country Evidence”, Journal of Financial Economics, 112(1): 116～135.
[16]
Liu, X. 2016. “Corruption Culture and Corporate Misconduct”, Journal of Financial Economics, 122(2): 307～327.
[17]
Loughran, T. and B.McDonald 2013. “IPO First-Day Returns, Offer Price Revisions, Volatility, and Form S-1 Language”, Journal of Financial Economics, 2013, 109(2): 307～326.
[18]
O'Connor, M. and M.Rafferty 2012. “Corporate Governance and Innovation”, Journal of Financial and Quantitative Analysis, 47(2): 397～413.
[19]
Oxley, J. E. and R. C.Sampson 2004. “The Scope and Governance of International R&D Alliances”, Strategic Management Journal, 25(8-9): 723～749.
[20]
Popadak, J. A. 2014. “A Corporate Culture Channel: How Increased Shareholder Governance Reduces Firm Value？”, SSRN Working Paper.
[21]
Talhelm, T., X.Zhang, S.Oishi, C.Shimin, D.Duan, X.Lan and S.Kitayama 2014. “Large-Scale Psychological Differences within China Explained by Rice Versus Wheat Agriculture”. Science, 344(6184): 603～608.
[22]
Zingales, L. 2015. “The Cultural Revolution in Finance”, Journal of Financial Economics, 1(117): 1～4.
