Multi-million dollar corporate decisions in China are significantly influenced by which animal's year a person was born in.
Executives are much less likely to sell their own company's stock during their Ben Ming Nian, which is their personal Chinese zodiac year. This behavior is driven by an ancient superstition that your birth year brings bad luck and increased risk. We expect high-level financial leaders to be immune to folklore when managing massive portfolios. The data proves that even at the highest levels of global finance, irrational belief systems still dictate market movements. This suggests that superstition is a measurable, hidden force in modern economics.
Superstition belief and insider selling: Evidence from Chinese Zodiac year
SSRN · 6730177
This paper examines whether cultural beliefs constrain insider selling by corporate insiders. To address the identification challenges in cultural research, we exploit Chinese zodiac-year superstition as an individual-specific, time-varying source of variation in perceived risk. Using transaction-level data on insider sales of Chinese A-share listed firms, we find that insiders significantly reduce the magnitude of their stock sales during their zodiac year, even after controlling for insider fi