Abstract: We study whether culture plays an important role in affecting corporate governance and behavior as an informal institution. Using a dataset of Chinese A-share non-financial listed companies from 2006 to 2017, this paper investigates the relationship between regional speculative culture and innovation. We find that a high level of speculative culture of corporate location and managers' speculative preference significantly enhances corporate innovation, and will lead to the increase in the number of patents. Moreover, the speculative culture of chairman birthplace enhances the connection between regional speculative culture and corporate innovation. Furthermore, the positive correlation between regional speculative culture and corporate innovation stems from the increase of innovation input; this correlation is more significant in private enterprises. A potential mechanism between regional speculative culture and corporate innovation is that speculative culture enhances companies' risk-taking ability, helping companies overcome fears of innovation risks and implement innovation behavior. Our results shed new light on the impact of regional culture on the micro-real economy.

Key words: speculative culture, corporate innovation, managers' characteristics, risk-taking