Panel study reveals that CEO zodiac-year superstition reduces corporate environmental investment in Chinese listed firms, indicating that culturally embedded cognitive biases drive risk aversion.
Superstitious beliefs, as culturally embedded cognitive biases, can influence managerial decision-making. This study examines the impact of CEOs’ zodiac-year superstition on corporate environmental investment. Using panel data on Chinese listed firms from 2008 to 2023, we find that CEOs become more risk-averse during their zodiac years, which leads firms to reduce environmental investment. This negative effect is weaker among younger or long-tenured CEOs and CEOs with academic or overseas backgrounds. It is also attenuated in state-owned firms, firms with low ownership concentration, and firms operating in polluting or capital-intensive industries. Specifically, the negative effect is concentrated in pollution control investments rather than pollution prevention investments. The findings highlight how culturally embedded managerial beliefs shape corporate environmental investment decisions by influencing CEOs’ risk preferences.
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Liu et al. (2026) studied this question.
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