CEO Superstitions, Luck-Improving Motivation, and Corporate Philanthropy: Evidence From the Chinese Zodiac Year

Abstract

In Chinese culture, there is a superstition that the zodiac year, recurring every 12 years from an individual's birth, brings bad luck. In this study, we examine the influence of underinvestigated cultural factors-specifically, the superstitions associated with Chinese zodiac years-on corporate philanthropy. Using a longitudinal data set of 25,206 firm-year observations from 4,114 Chinese listed companies between 2003 and 2022, we find a positive relationship between a CEO's zodiac year and corporate philanthropy: During a CEO's zodiac years, the amount of corporate giving significantly increases by 10 percentage points compared to non-zodiac years. Further, this relationship is more pronounced in firms led by earlier-born CEOs and those facing high work uncertainty. In addition, we conduct an experimental study to confirm that the CEO's perceived misfortune and belief in philanthropy as a way to improve luck are significant drivers of the increase in corporate philanthropy during their zodiac years. Overall, our study contributes to the literature on the determinants of corporate philanthropy and business ethics by clarifying the link between zodiac year superstitions and corporate philanthropy, as well as CEOs' motivations to improve personal luck through corporate philanthropy in their zodiac year.

Keywords: Superstition, Zodiac year, Corporate philanthropy, CEO’s birth year, Work uncertainty