Zodiac Year Fate Eased by CSR: Fact or Fiction?

Abstract

This study examines the relationship between the Chinese zodiac year of chairpersons and corporate social responsibility (CSR) performance. Drawing on upper echelons and stakeholder theories, we argue that zodiac beliefs may lead chairpersons to prioritise CSR activities during their zodiac year to counteract potential bad luck and mitigate corporate risk. Using 24,418 observations from Chinese listed firms over the period 2010–2020, our empirical analysis reveals a significant and positive effect of chairpersons' zodiac year on CSR performance. We observe that the effect is transient, appearing before and during the zodiac year but diminishing thereafter. Further, our findings show that the zodiac year effect is more pronounced in state-owned enterprises, firms with higher levels of public, environmental and CSR concerns and those with favourable environmental track records. This study extends the application of upper echelons and stakeholder theories by incorporating chairpersons’ zodiac year effect.