plays an important role in affecting corporate behaviors when formal
institutions fall short. Using China's A-share listed companies as a sample, we
analyze the impact of Chinese alcohol culture on corporate rent-seeking behavior.
We find that firms in regions in which alcohol plays a more prominent role show
more rent-seeking expense. The results are still robust when we use the regional
gender ratio and temperature as instruments. It is further found that a high
level of alcohol culture in CEOsí home region significantly enhances rent-seeking
expense. Moreover, the promoting
effect of alcohol culture on corporate rent-seeking is significantly reduced in
the state-owned firms or under the improvements in formal institutions. As for
influence mechanism, we find that the alcohol culture can promote the tendency
of executives and officials to engage in corruption. This paper provides micro
evidence for the impact of culture on the real economy.
classification numbers: G32, G38
Rent-seeking; Alcohol; Corruption