‘Forgetting’ or ‘Precipitation’: Literary inquisition in Qing Dynasty and modern enterprise risk preference

This paper takes the risk preference of modern listed companies as the research object, uses the financial data of Chinese listed companies combined with the literary inquisition file in Qing Dynasty to conduct an empirical study, and examines the influence of literary inquisition on the risk preference of modern corporate CEOs in Qing Dynasty. The study found that the literary inquisition incident in Qing Dynasty significantly affected and reduced the risk preference of modern enterprises. The competitive hypothesis of the influence of Confucian culture and China City Commercial Credit Environment Index (CEI) on CEOs’ risk preference is excluded. In addition, through the study of heterogeneity, this paper also verifies that the influence of literary inquisition is more significant in areas with a higher degree of marketization, indicating that the influence of informal institutions depends on the establishment of formal institutions. Finally, in the mechanism study, this paper points out that the rulers’ suppression of ideas will change long-term social capital and lead to the decrease of general trust in society, which will make the enterprise managers born in the region tend to be conservative in their risk preference.