Merchant Guild Culture and Stock Price Synchronicity: Evidence From China

ABSTRACT

This study investigates the influence of merchant guild culture on stock price synchronicity by using a sample of Chinese listed firms from 2003 to 2022. The findings reveal a significant negative association between merchant guild culture and stock price synchronicity. This relationship remains robust across multiple endogeneity and robustness checks. Mechanism analyses indicate that merchant guild culture influences stock price synchronicity through several channels, including information transparency, social trust and responsibility and risk‐taking preferences. Furthermore, heterogeneity tests demonstrate that the negative impact is more pronounced in non‐state‐owned enterprises, firms with more complex organizational structures, firms located in less marketized regions and firms operating in highly competitive industries. Overall, the results highlight the role of merchant guild culture as an informal institution that shapes corporate transparency and investor behaviour.