How Government and Cultural Tightness Influence Innovation in China: Insights from 2002–2022

What is it about?

This study explores how government policies, cultural norms, and innovation priorities have shaped innovation in China over two decades (2002–2022). Using data from 31 provinces, we analyzed government reports to measure policy strictness (tightness), flexibility (looseness), and focus on innovation. We found that strict government policies often hindered breakthrough innovations, while prioritizing innovation had mixed effects, sometimes even reducing overall progress. However, these dynamics shifted significantly after China launched its “Mass Entrepreneurship and Innovation (MEI)” campaign in 2014. Post-campaign, stricter policies started supporting innovation more effectively, while overly flexible policies became less helpful. Interestingly, when government policies and cultural norms were different in its tightness level, it initially encouraged innovation but later became counterproductive. Similarly, tight cultural norms that once supported innovation emphasis began to hold it back after MEI. Our findings highlight the need for policymakers to align government policies with local cultural conditions rather than applying one-size-fits-all strategies. This is especially important in regions with strong cultural traditions and institutional pressures, where tailored approaches can enhance innovation success.

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Why is it important?

Innovation is a cornerstone of economic growth and competitiveness, but its success relies on how well policies align with cultural and institutional contexts. Government tightness and looseness, alongside cultural tightness, play critical roles in shaping the effectiveness of innovation policies across regions. Large-scale national initiatives, such as China’s “Mass Entrepreneurship and Innovation (MEI)” campaign, can significantly alter these dynamics, redefining how policy and culture interact to influence innovation outcomes. Understanding these relationships is essential for designing targeted strategies that foster sustainable innovation, especially in diverse cultural and institutional landscapes. This study sheds light on these complex interactions, offering insights to optimize policy impacts in the context of such transformative campaigns.