On the afternoon of June 4, 2023, the 11th (172nd in total) of DUFE•Accounting and Finance Forum was held in 245 Quanxue Building as scheduled. Professor Fansheng Jia shared his academic paper entitled “Name, Identity and Agency Problems: Empirical Evidence from A-share Listed Companies” with the students and teachers present.
Based on the unique Chinese cultural tradition of naming a company with “Virtue”, Prof. Jia and his collaborators identify traditional Chinese morality imprinted on CEOs by names with moral meanings, and study the regulatory role and mechanism of traditional Chinese morality on corporate agency problems in the context of identity theory, thus expanding the path of culture-economy related research to “cultural tradition - individual cultural imprint - identity - (individual) economic behavior”. The research has found that: (1) companies with moral connotations in CEO names have significantly lower agency costs than other companies. In terms of economic significance, companies with CEOs with moral imprint have 3.85% lower agency costs than the average level, approximately 10.96 million yuan, accounting for 3.39% of the average net profit of all companies; (2) the regulatory effect of names with moral connotation on agency costs is more pronounced when the recognition of moral norms is higher in the CEO’s birth era, or when the Confucian cultural atmosphere in the CEO's birthplace is stronger; (3) The regulatory effect of names with moral meaning on agency costs is stronger when the corporate governance mechanism is imperfect; (4) The degree of encroachment on the interests of major shareholders and the possibility of violation are significantly lower in companies with moral connotations in CEO names.
In the end, Prof. Jia concluded that traditional morality can play a regulatory role in financial behavior, and it is necessary to attach importance to moral construction. In the exchange and discussion session, teachers and students were eager to ask questions and speak, creating a lively atmosphere on site. Professor Jia’s humorous and interesting presentation style left a deep impression on the students and teachers present, and the presentation ended successfully with the applause of everyone.
