The Impact of Communist Ideology on the Patenting Activity of Chinese Firms

Abstract

The Chinese Communist Party began decoupling its policies and practices from Maoist communist ideology more than four decades ago, yet, why does Maoism continue to influence the behavior of Party members? In this study, we argue that although the influence of Maoist ideology has become weaker among younger Party members and Party members with higher educational attainment, such ideological decay is countered by a process of secondhand ideological imprinting. Based on data from 1,298 non-state-owned Chinese listed firms for 2000–2017, we find that firms with Party-member board chairs file fewer patent applications and are more likely to commit patent infringement. These effects are weaker if a board chair is younger or has higher educational attainment. Importantly, the moderating effect of young age is reduced as the presence of older Party-member corporate directors in a region becomes more prominent. However, the moderating effect of education appears to be unaffected by the presence of older Party-member directors. These findings generate fresh insights on the dynamics of ideological decay and persistence.