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Chairman-CEO conflict and firm performance: evidence from zodiac matches in Chinese listed firms

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posted on 2022-09-26, 21:18 authored by Zini LiangZini Liang

Managerial conflicts may ultimately affect firm performance. This thesis investigates how superstitious beliefs regarding Chinese zodiac matches between the Chief Executive Officer (CEO) and chairman impact firm performance of listed companies in China. We find a significant negative impact of zodiac matches on firms’ operational performance (ROE). That is, firm performance is better when potential zodiac conflicts exist between the CEO and chairman. Moreover, the zodiac effect is only significant in non-state-owned enterprises (in which the chairman selects the CEO) and not state-owned-enterprises (in which the government selects both the chairman and CEO). In addition, when compared to the duality scenario (where the same individual serves as both chairman and CEO, and thus there is no conflict between the two roles), the negative influence of good zodiac matches on firm operational performance is weaker, while the influence of bad zodiac matches on firm operational performance is insignificant with the exception of financial performance (Tobin’s Q). Overall, we provide novel insights regarding the role of superstitious beliefs on firm development that are relevant to a range of stakeholders.


Table of Contents

1 Introduction -- 2 Literature Review and Development of Hypothesis -- 3 Data and Methodology -- 4 Empirical Results – References -- Appendix


Master of Research – Applied Finance

Awarding Institution

Macquarie University

Degree Type

Thesis MRes


Thesis (MRes), Department of Applied Finance, Macquarie Business School, Macquarie University

Department, Centre or School

Department of Applied Finance

Year of Award


Principal Supervisor

Jing Shi

Additional Supervisor 1

Jianlei Han


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47 pages

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