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The agricultural roots of Chinese innovation performance

Per G. Fredriksson, PhD J. Zhu J.B. Ang
European Economic Review. May 15, 2019

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A debate is brewing in the literature on whether legacies of rice and wheat cultivation in China matters for cultural attributes, in particular individualism vs. collectivism. In turn, this important cultural dimension has recently been shown to affect the pattern of innovation across countries. However, the previous literature has not firmly connected agricultural legacies and innovation rates, and has consistently used low resolution data. We study the role of agricultural legacy for innovation performance using unique patent data from close to two thousand Chinese counties. We provide robust evidence that counties with a legacy of rice cultivation generate fewer patent applications than other counties, and a legacy of wheat production tends to be associated with more patent applications. The results for rice are robust to, e.g., controlling for temperature, precipitation, irrigation, disease burden, religiosity, and corruption, as well as accounting for migration patterns. Our results firmly establish the importance of agricultural legacy for shaping the culture of innovation.