Confucius, Cars, and Big Government: Impact of Government Involvement in Business on Consumer Perceptions under Confucianism

Building on prior research in Confucianism and business, the current study examines the effects of Confucianism on consumer trust of government involvement with products and company brands. Based on three major ideas of Confucianism – meritocracy, loyalty to superior, and separation of responsibilities – it is expected that consumers under the influence of Confucianism would perceive products from government-involved enterprises to have more desirable attributes and show preference for their company brands. Findings from an empirical study in the Chinese automobile market support the hypotheses. The results suggest that small firms doing business in China would especially benefit from some association with the government. These results also provide managerial implications for enterprises in other countries with a Confucian cultural background.