Author(s)

Yifan Peng ¹, Hongmei Liu ¹

Affiliation(s)

¹ School of Accounting, Guizhou University of Finance and Economics, Guiyang, 550025, China

Corresponding Author

Yifan Peng

ABSTRACT

The tradition of revolution has not only exerted a profound impact on the Chinese development, but has also gradually permeated into the realm of modern corporate governance. We proposed that informal institutions, such as culture, can explain minority shareholder expropriation. Based on data from Chinese listed firms from 2009 to 2022, we documented that inhibitory effects of tradition of revolution on corporate minority shareholder expropriation. Heterogeneity analysis shows that the baseline results is more pronounced in SOE and in firms where the CEO has been in post for a longer period of time. The findings expand the scope of cultural factors from a financial perspective, providing insights into the significance that Chinese government departments ascribe to the social governance functions of informal institutions.

KEYWORDS

Culture; Tradition of Revolution; Minority Shareholder Expropriation; Tunneling; Abnormal Related-Party Transactions; Governance

CITE THIS PAPER

Yifan Peng, Hongmei Liu, The Legacy from the Past: Tradition of Revolution and Minority Shareholder Expropriation. Accounting and Corporate Management (2025) Vol. 7: 146-153. DOI: http://dx.doi.org/10.23977/acccm.2025.070320.

REFERENCES

[1] La Porta, Rafael, Florencio Lopez‐de‐Silanes, and Andrei Shleifer, 1999. Corporate ownership around the world, The journal of finance 54, 471-517.
[2] Bebchuk, L. A., R. Kraakman, and G. G. Triantis, 1998. Stock pyramids, cross-ownership, and dual class equity - The mechanisms and agency costs of separating control from cash-flow rights (Banff, Canada).
[3] Bertrand, Marianne, and Sendhil Mullainathan, 2000. Agents with and without principals, American Economic Review 90, 203-208.
[4] Shleifer, Andrei, and Robert W Vishny, 1997. A survey of corporate governance, The journal of finance 52, 737-783.
[5] Allen, Franklin, Jun Qian, and Meijun Qian, 2005. Law, finance, and economic growth in China, Journal of financial economics 77, 57-116. 
[6] Williamson, O. E. (2000). The new institutional economics: Taking stock, looking ahead. Journal of Economic Literature, 38(3), 595-613.
[7] Gu, Zhihui, Wei Sun, and Frank S Zhou, 2024. Cultural origin and minority shareholder expropriation: Historical evidence, Journal of Accounting Research 62, 181-228.
[8] Du, X. (2013). Does religion matter to owner-manager agency costs? Evidence from China. Journal of Business Ethics, 118(2), 319-347.
[9] Du, X. (2014). Does religion mitigate tunneling? Evidence from Chinese Buddhism. Journal of Business Ethics, 125(2), 299-327.
[10] Du, Xingqiang, 2015. Does Confucianism reduce minority shareholder expropriation? Evidence from China, Journal of Business Ethics 132, 661-716.
[11] Hilary, Gilles, and Kai Wai Hui, 2009. Does religion matter in corporate decision making in America? Journal of financial economics 93, 455-473.
[12] Gu, Zhihui, 2015. Confucian ethics and agency costs in the context of globalisation, Journal of Management World, 113-123.
[13] Liu, Lanyua, Li-an Zhou, and Qi Wu, 2021. Long-term Economic Consequences of Traditional Business Culture: Evidence from Ming-Qing Guilds, Journal of Management World 37, 106-120+108.
[14] Pan, Yue, Ruoyu Wong, Xiangge Ji, and Yiyi Dai, 2019. Clan Culture and the Blood Complex of Family Firm Governance, Journal of Management World 35, 116-135+203-204.
[15] Wu, Wuqing, and Zhenhan Hong, 2024. The Contemporary Significance of Revolutionary Culture: Evidence from the Suppression of Corporate Misconduct by the Long March Spirit, The Journal of World Economy, 3-29.
[16] Johnson, Simon, Rafael La Porta, Florencio Lopez-de-Silanes, and Andrei Shleifer, 2000. Tunneling, American Economic Review 90, 22-27.
[17] Jiang, Fuxiu, Yunbiao Ma, and Yuntong Wang, 2015. Can exit threats curb controlling shareholders' self-interested behaviour?, Journal of Management World, 147-159.
[18] Zhou Zejiang, Lei Ling, and Wang Biaohua, 2022. Does Executive Integrity Restrain Major Shareholders’ Tunneling? —Empirical Evidence from Chinese State-owned Listed Companies, Management Review 34, 279-292.
[19] Lu, Taiping, and Tengfei Ma, 2021. Independent Director Compensation and Tunneling of Major Shareholders: Incentive or Collusion, Finance and Trade Research 32, 94-105.
[20] Sun Zeyu, Qi Baolei, and Cui Xiaoyu, 2020. Opening of Capital Markets and Tunneling by Major Shareholders: Based on Empirical Evidence from the Shanghai - Hong Kong and Shenzhen - Hong Kong Stock Connect Trading System, Financial Economics Research 35, 94-107.
[21] Nie, Ping, and Zaizhen Pan, 2019. Inquiry Letters Supervision and Tunneling of Controlling Shareholders:  Evidence from Shanghai and Shenzhen Stock Exchange of Annual Report Inquiry, Journal of Audit & Economics 34, 91-103.
[22] Jian, Ming, and Tak Jun Wong, 2010. Propping through related party transactions, Review of Accounting Studies 15, 70-105.
[23] Zhang Ming, Lan Haililn, Chen Weihong, and Zeng Ping, 2021. Indigenous Religious Tradition and Corporate Tax Avoidance —An Empirical Study Based on 34 100 Monasteries and 8 349Temples in China, China Economic Quarterly 21, 1345-1368. 
[24] Li Houqiang, Hou Shuiping, and Yang Xiannong, 2012. Carrying forward the Long March Spirit to build a cultural powerhouse, Studies in Mao Zedong Thought 1.

Sponsors, Associates, and Links

---

• Information Systems and Economics
  
  
• Accounting, Auditing and Finance
  
  
• Industrial Engineering and Innovation Management
  
  
• Tourism Management and Technology Economy
  
  
• Journal of Computational and Financial Econometrics
  
  
• Financial Engineering and Risk Management
  
  
• Social Security and Administration Management
  
  
• Population, Resources & Environmental Economics
  
  
• Statistics & Quantitative Economics
  
  
• Agricultural & Forestry Economics and Management
  
  
• Social Medicine and Health Management
  
  
• Land Resource Management
  
  
• Information, Library and Archival Science
  
  
• Journal of Human Resource Development
  
  
• Manufacturing and Service Operations Management
  
  
• Operational Research and Cybernetics