Culture and the Historical Persistence of Minority Shareholder Expropriation
54 Pages Posted: 18 Feb 2021 Last revised: 15 Jul 2021
Date Written: January 6, 2021
Can historical culture explain persistent regional differences in minority shareholder expropriation? We document that minority shareholder expropriation in Chinese public firms is negatively associated with regional Confucian culture, captured by data from the Qing Dynasty of Imperial China (1644--1912 AD). The results are robust to controlling for local economic development, enforcement of property rights, and geography and to using two instruments constructed from data in the Ming Dynasty (1368--1644 AD). The findings suggest that Confucian culture represents a fundamental force that constrains minority shareholder expropriation, which has important implications for capital market and economic development (Acemoglu, Johnson, and Robinson, 2001; Rajan and Zingales, 2003).
Keywords: Minority shareholder expropriation; Tunneling; Culture; Confucianism; Historical Persistence
JEL Classification: M14, N25, N95, O16, M41
Suggested Citation: Suggested Citation