Stillness and non-action: Can indigenous religious traditions curb corporate market monopolies? Evidence from eastern China

In the process of building a high-level socialist market economy system, effectively curbing market monopolies remains an urgent theoretical and practical challenge. This study incorporates China’s indigenous Buddhist and Taoist religious traditions into an industrial organization framework. Using data from A-share listed companies in eastern China from 2009 to 2023, it empirically examines the restraining effect of local religious traditions on market monopolies and its underlying mechanisms. Findings reveal: First, the density of Buddhist and Taoist religious sites near corporate headquarters exhibits a significant negative correlation with market share, indicating that indigenous religious traditions effectively curb corporate market monopolies. This conclusion remains robust after undergoing a series of stability and endogeneity tests. Second, the mechanism analysis reveals dual pathways: ‘optimization of the macro-market environment’ and ‘constraints on micro-firm pricing behavior’. Religious traditions simultaneously foster fair competition by enhancing regional marketization levels and directly weaken monopolistic power by suppressing firms’ cost markup rates. Moderation effects indicate that firm innovation levels weaken this suppression, while executives’ green cognition strengthens it. Heterogeneity analysis further reveals that the governance effect of religious traditions is significant only in private enterprises, highlighting how the efficacy of informal institutions is constrained by formal property rights arrangements.