Confucian Culture and Stock Price Synchronicity

Under the background of giving full play to the decisive role of the market in resource allocation, it is of great significance to explore whether traditional culture can reduce stock price synchronicity, which will optimize the information environment of China’s capital market and improve the efficiency of resource allocation. Based on the sample of A-share listed companies from 2007 to 2022, this paper empirically tests the influence of Confucian culture on stock price synchronicity. It is found that the stronger the influence of Confucian culture on the company, the lower the stock price synchronicity. The mechanism test proves that Confucian culture can reduce the asymmetry of internal and external information of enterprises so that the stock price can reflect more information about the company’s characteristics, and then reduce the stock price synchronicity. Further discussion shows that the restraining effect of Confucian culture on enterprise stock price synchronicity is more obvious in areas with less impact from foreign culture and poor external legal environment. The above conclusions not only help to understand the positive economic impact of Confucian culture, but also enrich the influencing factors of stock price synchronicity from a cultural perspective, and provide decision-making reference for giving full play to the decisive role of the market in resource allocation.