Confucian Culture and Enterprise Strategic Change from a Perspective of the Golden Mean Ethics

As an important informal system, the impact of Confucian culture on enterprise strategic change decision‐making and economic and social development is often ignored. By using the OLS method and drawing from publicly listed companies on China's Shanghai and Shenzhen stock markets from 2002 to 2020 as research samples, this article empirically analyzes the relationship between Confucian culture and enterprise strategic change from the perspective of the “golden mean” ethics (a Confucian moral standard and philosophy of conduct). The article also attends to the moderating effects of foreign culture shock and stock rights between the relationship of Confucian culture and enterprise strategic change. A key finding is that the ethical thought of “golden mean” and “harmony” contained in Confucian culture has an inhibitory effect on the initiation of enterprise strategic change. Foreign culture shock positively moderates the relationship between Confucian culture and enterprise strategic change. When “shocked” by dominant foreign cultures, the negative impact of Confucian culture on enterprise strategic change will be weakened. Moreover, unlike previous research findings based on agency theory that suggests how state ownership may retard corporate development, the authors found that in an informal institutional environment with a strong Confucian culture, stock rights can play a positive moderating role in the relationship between Confucian culture and enterprise strategic change. When an enterprise is state‐owned, the inhibitory effect of Confucian culture on enterprise strategic change will be weakened further.