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Merchant guild culture and corporate violations: Evidence from China

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  • Chen, Na

Abstract

Existing studies highlight the role of formal institutions in constraining corporate violations, but the influence of informal institutions remains relatively underexplored. Using data from Chinese A-share listed firms from 2013 to 2021, this paper investigates the impact of merchant guild culture on corporate violations. Our findings indicate that firms with a stronger merchant guild culture exhibit lower levels of corporate violations. This effect is more pronounced in non-state-owned firms and those with lower external supervision. Mechanism analysis reveals that the normative effect of merchant guild culture—characterized by social values that promote fair competition and lead firms to reconsider the excess costs associated with misconduct—explains variations in corporate violation behavior. Overall, our study provides valuable insights into the economic effects of merchant guild culture, particularly concerning corporate governance.

Suggested Citation

  • Chen, Na, 2026. "Merchant guild culture and corporate violations: Evidence from China," China Economic Review, Elsevier, vol. 97(C).
    • Handle: RePEc:eee:chieco:v:97:y:2026:i:c:s1043951x26000362
    DOI: 10.1016/j.chieco.2026.102686
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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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