Keju tradition and major litigation cases: The persistent impact of Confucian norm standard

Using the variation in China's civil examination system (keju) achievements across prefecture‐level cities in the Ming–Qing period (c.1368–1905), we find that keju tradition has a persistent impact on the norm of business ethics today. With one standard deviation increase of keju tradition inte...

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Bibliographic Details
Published in:Accounting and finance (Parkville) 2024-12, Vol.64 (5), p.4647-4673
Main Authors: Hu, Xuefeng, Wang, Wenlan, Xu, Rong, Xiao, Fulong
Format: Article
Language:English
Subjects:
business ethics
corporate misconduct
keju tradition
major litigation
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Summary:Using the variation in China's civil examination system (keju) achievements across prefecture‐level cities in the Ming–Qing period (c.1368–1905), we find that keju tradition has a persistent impact on the norm of business ethics today. With one standard deviation increase of keju tradition intensity, the probability of major litigation cases for local listed firms decreases by nearly 12% of the sample mean. The persistent effect of keju tradition can be attributed to two channels, the social value of fair competition and the excess cost of misconduct. Further analysis shows that our result is not driven by conservatism.
ISSN:0810-5391
1467-629X
DOI:10.1111/acfi.13300