Confucian culture, environmental innovation, and family firms' performance: The moderating role of market competition

Abstract Environmental innovation has become an important way for family firms to meet institutional requirements and market demands. Based on the dual perspectives of informal institution and environmental innovation, this study constructs a research framework of “culture‐innovation‐performance” to explore the relationship between Confucian culture, environmental innovation, and family firm performance as well as the moderating role of market competition intensity. A total of 529 family firms in the manufacturing industry listed on the Shanghai and Shenzhen A‐share stock markets between 2015 and 2021 were selected as the research sample to test the hypotheses using multiple regression analysis. The results indicate that Confucian culture significantly promotes the quality of environmental innovation but does not have a significant effect on the quantity of environmental innovation; moreover, both the quantity and quality of environmental innovation can promote the performance of family firms, and this promoting effect is stronger in an environment with lower market competition intensity. This study not only enriches the application of Confucian culture in environmental innovation but also provides guidance on how firms can improve the quality of environmental innovation.