Confucianism in Financial Management and Corporate Governance: A Review of Contemporary Applications

Abstract

This literature review examines the profound influence of Confucian philosophy on financial management and corporate governance, addressing the growing fusion of cultural ethos and economic strategies. The aim is to elucidate the historical and ethical legacies of Confucian values within the context of contemporary business practices. Synthesizing seminal works across various domains and geographical contexts, this review highlights Confucian principles' impact on modern business practices. Theoretical background on Confucian philosophy is provided, emphasizing its relevance in governance, social ethics, and education, and its integration with management and corporate ethics, notably through concepts like "Guanxi." The review systematically analyses the literature on the intersection of Confucianism with financial management, exploring aspects such as cash holding, earnings management, investment efficiency, and stock price stability. In the realm of corporate governance, attention is given to Confucianism's influence on leadership styles, decision-making processes, stakeholder theory, and agency theory. Identified gaps include understanding Confucianism's role in contemporary financial innovations, fintech solutions, and global corporate ethics, suggesting directions for future research. This review contributes to financial management, corporate governance, and cross-cultural business studies by offering a comprehensive perspective blending historical insights with current applications. It underscores Confucian principles' dynamic relevance in guiding ethical and sustainable business practices in the global business landscape.