This study documents the effect of CEO's identification with their hometown on corporate social responsibility (CSR). We propose that firms headquartered in their CEOs’ hometowns tend to do more CSR. This is because identification with their hometown activates CEOs’ altruistic tendency to be more prosocial and makes them more likely to have long-term goals, both of which are compatible with the nature of CSR. This hometown identity effect is stronger when the firm is more locally connected and is weaker when the firm is located in a region with more diverse dialects. Analyzing a large sample of publicly listed Chinese firms for 2009–2016, we found strong support for our predictions. The robustness of our findings is confirmed by a field survey, a difference-in-differences (DID) approach, the Heckman two-stage model, the impact threshold of confounding variables (ITCV), and alternative measures of CSR and CEO hometown identity.
New ventures are often short of resources crucial to their survival and development. This research sheds new light on how new ventures can obtain better access to external resources by analysing a survey of a large sample of Chinese private entrepreneurs. We found that by comparison with their non-Buddhist counterparts, Chinese Buddhist entrepreneurs tend to give greater attention to external activities and have a higher chance of gaining sociopolitical legitimacy and therefore have a better chance of accessing external resources such as bank loans. Moreover, the indirect effect on bank loans of the amount of attention allocated to external activities by Chinese Buddhist entrepreneurs is weakened by lower government intervention and better development of intermediary agencies in regions where new ventures are located, largely due to Chinese Buddhist entrepreneurs' reduced reliance on sociopolitical legitimacy to access external resources.
Recent research has shown that a CEO's personal experiences in his or her early days have an influence on his or her decision-making as an executive later on. Our study extends this emerging stream of research by examining how CEOs’ pre-career exposure to religion affects their firms’ risk-taking and subsequent innovation performance. Drawing upon developmental psychology research and imprinting theory, we argue that CEOs who have attended a religious college are more likely to develop or reinforce their risk-averse mentality. This carries over to their professional life when they are in a top management position, and it leads to less risk-taking behavior in their firms and ultimately a lower level of firm innovation. Using a large sample of U.S. publicly listed companies, we find strong support on our hypotheses: Firms managed by CEOs who attended a religious college tend to be less risk-taking; this effect is stronger when the firm has more board members with pre-career exposure to religion; in addition, the firm's risk-taking behavior mediates the negative relationship between CEO pre-career religious exposure and firm innovation. We discuss the implications of our study for the strategic leadership literature, firm's risk-taking, and innovation research.
The extant research has often examined the work-related experiences of corporate executives, but their off-the-job activities could be just as insightful. This study employs a novel proxy for the risky hobbies of chief executive officers (CEOs)—CEOs’ hobby of piloting a private aircraft—and investigates its effect on credit stakeholders’ evaluation of the firms led by the CEOs as reflected in bank loan contracting. Using a longitudinal data set on CEOs of large United States-listed firms across multiple industries between 1993 and 2010, we obtain strong evidence that bank loans to firms steered by CEOs who fly private jets as a hobby tend to incur a higher cost of debt, to be secured, to have more covenants, and to be syndicated. These effects are mainly driven by banks, which perceive such firms as having a higher default risk. These relationships become stronger when the CEO is more important to the firm and/or can exercise stronger control over decision making. Supplemented by field interviews, our results are also robust to various endogeneity checks using different experimental designs, the Heckman two-stage model, a propensity score-matching approach, a difference-in-differences test, and the impact threshold of confounding variables.
How will a chief sustainability officer (CSO) influence corporate social performance? Building upon the upper echelons perspective and the attention‐based view, this study argues that while a CSO helps channel managerial attention to a firm's social domain, managerial attention is more likely to be directed to negative issues than to positive issues. In addition, such relationships are contingent on the focal firm's governance design and its industry culpability. Analysis of a sample of S&P 500 firms for the period of 2005–2014 largely renders support to our predictions.