Zodiac compatibility between chairmen and CEOs and its impacts on corporate philanthropy in SOEs

Separating the chairman and CEO positions is a common requirement for mitigating agency problems in Chinese state-owned enterprises (SOEs), but Western policies often do not function well in Eastern countries. We propose that the traditional Chinese zodiac may provide better guidance. Specifically, we explore the antecedents of corporate philanthropic giving in SOEs and find that compatible zodiac signs between chairmen and CEOs restrain strategic- driven giving and promote agency-driven giving. Moreover, whether and to what extent chairmen and CEOs share zodiac culture moderates these relationships. We find stronger relationships among firms in regions with high Taoist norms and weaker relationships when the age gap between chairmen and CEOs is larger. This study thus extends our understanding of how Chinese zodiac culture intertwines with Western knowledge of corporate governance to influence SOE practices in China.