RESEARCH ARTICLE
Keju tradition and major litigation cases: The persistent impact of Confucian norm standard
Xuefeng Hu,
Wenlan Wang,
Rong Xu,
Fulong Xiao,
Xuefeng Hu
School of Smart Governance, Renmin University of China, Suzhou, Jiangsu, China
Search for more papers by this authorCorresponding Author
Wenlan Wang
School of Finance, Shanghai University of International Business and Economics, Shanghai, China
Correspondence
Wenlan Wang, School of Finance, Shanghai University of International Business and Economics, Shanghai, China.
Email: [email protected]
Search for more papers by this authorRong Xu
School of Finance and China Financial Policy Research Centre, Renmin University of China, Beijing, China
School of Business and Economics, Algoma University, Brampton, Ontario, Canada
Search for more papers by this authorFulong Xiao
Department of Applied Finance, Macquarie University, Sydney, New South Wales, Australia
Search for more papers by this authorXuefeng Hu,
Wenlan Wang,
Rong Xu,
Fulong Xiao,
Xuefeng Hu
School of Smart Governance, Renmin University of China, Suzhou, Jiangsu, China
Search for more papers by this authorCorresponding Author
Wenlan Wang
School of Finance, Shanghai University of International Business and Economics, Shanghai, China
Correspondence
Wenlan Wang, School of Finance, Shanghai University of International Business and Economics, Shanghai, China.
Email: [email protected]
Search for more papers by this authorRong Xu
School of Finance and China Financial Policy Research Centre, Renmin University of China, Beijing, China
School of Business and Economics, Algoma University, Brampton, Ontario, Canada
Search for more papers by this authorFulong Xiao
Department of Applied Finance, Macquarie University, Sydney, New South Wales, Australia
Search for more papers by this authorFirst published: 08 August 2024
Abstract
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.
Open Research
DATA AVAILABILITY STATEMENT
The data that support the findings of this study are available on request from the corresponding author.
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