Seeking blessings by doing good: Top executive superstitions and corporate philanthropy

Xianjun Cai, Lin Liao, Yukun Pan and Kun Wang

Journal of Corporate Finance, 2025, vol. 92, issue C

Abstract: Corporate giving is a substantial expenditure for firms. However, understanding the motives behind such spending remains challenging. This study tests the agency motive of corporate philanthropy by investigating top executives' zodiac year superstition, a culturally embedded, time-varying phenomenon. We find that firms led by board chairs in their zodiac years exhibit a significant increase in charitable donations, with the effects being stronger for firms led by board chairs with lower educational attainment and a lack of overseas experience, as well as non–state owned firms, underperforming firms, and firms with weak corporate governance. Furthermore, these increases in charitable donations are temporary and do not translate into long-term philanthropic commitments or improved firm performance, corroborating their agency-driven nature. Overall, our study provides new insights into the role of managerial beliefs and preferences in shaping corporate behavior.

Keywords: Corporate philanthropy; Board chair superstition; Zodiac year; Managerial beliefs (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:92:y:2025:i:c:s0929119925000434

DOI: 10.1016/j.jcorpfin.2025.102775

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