Abstract: Based on the existing research, this paper explores how the large stockholders involvement affects independent innovation, and reveals the moderating effect of corporate culture. Besides, this paper discusses the effect of trust between large stockholders and managers on large stockholders involvement, and the effect of trust on independent innovation. This paper explores the relationships using data from 182 Chinese firms, and the empirical findings show that large stockholders involvement has a significant negative effect on independent innovation; the relationship between trust and large stockholders involvement is U-shaped; and large stockholders involvement intermediates the inverted U-shaped relationship between trust and independent innovation. The results also show that bureaucratic culture can weaken the negative effect between large stockholders involvement and independent innovation, and demonstrate the bureaucratic culture can play a positive role in firm’s innovation.

Key words: trust level, large stockholders involvement, innovative culture, bureaucratic culture, independent innovation