Does a CEO’s Cultural Heritage Affect Performance Under Competitive Pressure?

Review of Financial Studies, Vol. 31, No. 1, 2018

58 Pages Posted: 1 Feb 2017 Last revised: 26 Mar 2018

See all articles by Duc Duy Nguyen

Duc Duy Nguyen

King's College London

Jens Hagendorff

University of Edinburgh - Business School

Arman Eshraghi

Cardiff Business School

Date Written: December 17, 2016

Abstract

We exploit variation in the cultural heritage across U.S. CEOs who are the children or grandchildren of immigrants to demonstrate that the cultural origins of CEOs matter for corporate outcomes. Following shocks to industry competition, firms led by CEOs who are second- or third-generation immigrants are associated with a 6.2% higher profitability compared with the average firm. This effect weakens over successive immigrant generations and cannot be detected for top executives apart from the CEO. Additional analysis attributes this effect to various cultural values that prevail in a CEO’s ancestral country of origin.

Keywords: CEOs, Cultural values, Competition, Performance, Corporate investments

JEL Classification: G30, M14, Z1

Suggested Citation

Nguyen, Duc Duy and Hagendorff, Jens and Eshraghi, Arman, Does a CEO’s Cultural Heritage Affect Performance Under Competitive Pressure? (December 17, 2016). Review of Financial Studies, Vol. 31, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=2909638

Duc Duy Nguyen

King's College London ( email )

Strand
London, England WC2R 2LS
United Kingdom

HOME PAGE: http://sites.google.com/site/louisnguyen6589/home

Jens Hagendorff (Contact Author)

University of Edinburgh - Business School ( email )

University of Edinburgh
29 Buccleuch Place
Edinburgh, Scotland EH8 9JS
UNITED KINGDOM

Arman Eshraghi

Cardiff Business School ( email )

Colum Drive
Cardiff, CF10 3EU
United Kingdom

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