Being Good by Hiring Directors with Foreign Experiences
69 Pages Posted: 15 Aug 2015 Last revised: 6 Mar 2017
Date Written: August 14, 2015
Using a manually collected dataset on the overseas experiences of directors for Chinese listed firms, we examine effects of returnee directors on firms’ corporate social responsibility engagement (CSR). Our results show that returnee directors significantly improve firms’ CSR engagements. The significant positive relationship is more pronounced for firms in lower competitive industry, with high leverage ratios, with CEOs politically connected to the government, and with aged CEOs. Furthermore, we find that only returnee directors’ long-term foreign experience matters, such as education and working experience, but short-term visiting experience does not contribute to above findings. Finally, our results are robust after controlling for endogeneity. This paper thus offers clear policy implications by suggesting that hiring more returnees as management directors could be one efficient way to enhance firms’ CSR quality, which may be of particular interest to regulators in emerging markets.
Keywords: Corporate social responsibility, Returnee directors, China,
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