The Role of Social Proximity in Professional CEO Appointments: Evidence from Caste/Religion-Based Hiring of CEOS in India

50 Pages Posted: 8 Jan 2018

See all articles by Naga Lakshmi Damaraju

Naga Lakshmi Damaraju

Indian School of Business (ISB), Hyderabad

Anil K. Makhija

Ohio State University (OSU) - Department of Finance

Date Written: October 4, 2017

Abstract

We test for the role of homophily in the appointments of CEOs in India by empirically examining the preference for same caste/religion CEOs by the largest firms. We find that caste/religion plays an important role in CEO selection. However, the evidence is not consistent with its use as a “taste-based preference” or “negative discrimination.” On the contrary, the evidence supports its use as a source of “information” or “positive discrimination.”

Keywords: CEO Appointments, Homophily, Social Proximity, Caste/Religion in India, Corporate Governance

JEL Classification: M10

Suggested Citation

Damaraju, Naga Lakshmi and Makhija, Anil K., The Role of Social Proximity in Professional CEO Appointments: Evidence from Caste/Religion-Based Hiring of CEOS in India (October 4, 2017). Available at SSRN: https://ssrn.com/abstract=3096436 or http://dx.doi.org/10.2139/ssrn.3096436

Naga Lakshmi Damaraju (Contact Author)

Indian School of Business (ISB), Hyderabad ( email )

Hyderabad, Gachibowli 500 019
India

Anil K. Makhija

Ohio State University (OSU) - Department of Finance ( email )

2100 Neil Avenue
Columbus, OH 43210-1144
United States
614-292-1899 (Phone)

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