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Confucian culture and corporate maturity mismatch: evidence from China

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  • Zhang, Ning
  • Liu, Cai

Abstract

Corporate maturity mismatch (hereafter, MM), referring to the practice of financing long-term investments with short-term debt, exposes firms to significant refinancing and liquidity risks. This study examines the role of informal institutions, specifically whether Confucian culture is associated with MM in Chinese listed firms. Using Confucian temples near firm headquarters as a cultural proximity measure, we find that firms with greater Confucian culture exposure exhibit significantly lower MM. This negative association operates through enhanced financial reporting quality and reduced managerial opportunism. The effect is more pronounced among firms in competitive industries and those with higher analyst coverage. Our findings demonstrate that informal institutions shape corporate financing strategies and suggest cultural factors complement formal governance mechanisms in constraining risky financial practices.

Suggested Citation

  • Zhang, Ning & Liu, Cai, 2026. "Confucian culture and corporate maturity mismatch: evidence from China," Finance Research Letters, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finlet:v:87:y:2026:i:c:s1544612325022147
    DOI: 10.1016/j.frl.2025.108961
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