How Confucian culture enhances corporate resilience: evidence from China

This study applies a historical culture perspective to examine the influence of traditional Confucian thought on the resilience of contemporary firms using data from the COVID-19 pandemic period for companies publicly listed in China. We employ the least squares method and empirically find that companies in regions with a stronger Confucian culture experience less stock price loss and faster recovery. We also find that this association is more pronounced for firms with severe agency conflicts, dominated by short-term institutional investors, and facing high environmental uncertainty. These findings indicate that firms influenced by the Confucian culture reduce short-term speculative behaviours and implement strategic decisions that are conducive to long-term development, thereby enhancing corporate resilience. Further, mechanism tests show that the Confucian culture enhances corporate resilience by promoting technological innovation, improving the quality of human capital, and enhancing corporate social responsibility performance. Overall, our findings support the conjecture that historical culture may significantly influence corporate resilience.