Confucianism And Tunneling

The tunneling of major shareholders has become the focus of modern corporate governance practices.In the Chinese scenario,from the perspective of cultural and other informal systems,exploring ways to curb the tunneling of major shareholders and construct investor protection systems can compensate for the regret of the formal system to a certain extent.After more than two thousand years of development,the philosophical ideas,humanistic spirit,enlightenment thought and moral concept of Confucianism also provide useful inspiration for the formation of modern corporate business philosophy,the cultivation of entrepreneurial values and the shaping of Chinese corporate spirit.When the company’s external governance mechanism is relatively weak,the "loyalty" ethics and "righteousness" values advocated by the Confucianism will become important factors affecting the tunneling of major shareholders.Based on the financial data of A-share non-financial listed companies in Shanghai and Shenzhen from 2003 to 2017,this paper empirically analyzes the influence of Confucianism on the tunneling of major shareholders.The research results show that Confucianism is significantly negatively related to the tunneling of major shareholders.Heterogeneity test results show that in private enterprises,enterprises with lower marketization,less impact on foreign cultures,less damage to Confucianism,lower levels of rule of law development,higher equity concentration and higher separation of two rights,the Confucianism has a more significant inhibitory effect on tunneling of major shareholders.Further research finds that the Confucianism will suppress the tunneling of major shareholders by improving the quality of internal control and social capital;and it excludes the alternative hypothesis of the influence of religious traditions;In addition,Confucianism can also improve the investment efficiency of enterprises.The basic conclusions of this paper are still robust after a series of tests,such as two-stage least squares regression using chastity memorial arches as a tool variable,taking into account minority cultures and a placebo test.This article further expands the research on the impact of informal institutions on corporate governance,enriches the related theories of “ cultural finance ” and also provides some references for regulators when formulating related institutions.For example,they can start from a cultural perspective to promote the concept of investor protection,correct the tendency of tunneling of major shareholders and promote thehealthy development of the securities market.