Gospel across the millennium:Confucian cultureand innovation in China

Confucian culture has had a significant impact on contemporary Chinese society for thousands of years. However, whether it is a "gospel" or a "curse" for science and technology innovation in contemporary China is still controversial. To measure the extent of Confucian culture, we use the density of Confucian cultural sites and test its causal relationship with innovation. The data suggests that regions with a strong influence of Confucian culture have higher levels of innovation. This finding remains consistent even after conducting instrumental variable regression and multiple robustness tests. Mechanistic analyses demonstrate that Confucian culture can promote innovation by reinforcing good governance, improving education, and enhancing intellectual property protection. The study reveals that Confucianism has a stronger impact in regions with lower business credit. Additionally, it suggests that Confucianism and formal institutions can be interchangeable. Moreover, foreign cultures may diminish the influence of Confucianism in fostering innovation.