Confucian Culture and Firms Green Innovation: Value Guidance from Informal Institutions

Against the backdrop of building an innovation-driven nation, how traditional culture can exert contemporary value and function has become a core issue urgently requiring exploration. This paper examines the mechanisms and pathways through which the Confucian tradition shapes contemporary firms green innovation behaviors. Empirical evidence shows that Confucian culture has a clear promoting effect on firms green innovation; specifically, the deeper a firm is influenced by Confucian culture, the higher its level of green patent output. Further tests reveal two channels: Confucian culture fosters green innovation mainly by alleviating agency conflicts within firms and enhancing awareness of environmental responsibility. Meanwhile, Confucian culture as an informal institution and the formal legal environment exhibit a substitution relationship in promoting corporate innovation. From a micro-enterprise perspective, this study explicates the underlying mechanisms by which Confucian thought advances green innovation, thereby moving beyond entrenched ruts in prior research on the value of Confucian culture. The findings not only contribute empirical evidence from an Eastern context to the international literature on culture and corporate decision-making, but also, at a practical level, underscore the need to strengthen cultural confidence and proactively draw on the wisdom of Chinas fine traditional culture to address real-world problemsachieving an innovation pathway that unifies knowledge and action.