Drinking into Friends: Alcohol Drinking Culture and CEO Social Connections

41 Pages Posted: 31 Dec 2019

See all articles by Cailing Huang

Cailing Huang

Central South University, School of Business, Students

Jianxin Wang

Central South University; George Mason University, Department of Economics, Students; George Mason University - Interdisciplinary Center for Economic Science (ICES)

Lin Xu

Central South University, School of Business, Students

Date Written: December 10, 2019

Abstract

The influences of a CEO’s social connections to a firm have received much attention. However, less has been investigated on between-CEOs differences in building connections. This paper is a step towards filling this gap by investigating whether CEOs social connections are influenced by China’s local alcohol drinking culture. We use the sample of Chinese listed companies to test our hypotheses. We find that CEOs whose firms are located in regions with strong alcohol drinking culture have more social connections, both inside and outside the firms. We further find that the drinking culture only significantly affects the social connections of male CEOs, but not female CEOs. These findings remain robust after accounting for endogeneity by instrumental variable approach. This paper introduces the role of local alcohol drinking culture in CEOs social capital accumulating and sheds new lights on the impact of local culture on CEOs behaviors.

Keywords: CEO social connections, Alcohol drinking culture, Gender difference

JEL Classification: G30, M14

Suggested Citation

Huang, Cailing and Wang, Jianxin and Xu, Lin, Drinking into Friends: Alcohol Drinking Culture and CEO Social Connections (December 10, 2019). Available at SSRN: https://ssrn.com/abstract=3501300 or http://dx.doi.org/10.2139/ssrn.3501300

Cailing Huang

Central South University, School of Business, Students ( email )

Changsha, Hunan 410083
China

Jianxin Wang (Contact Author)

Central South University ( email )

Changsha, Hunan 410083
China

George Mason University, Department of Economics, Students ( email )

Fairfax, VA
United States

George Mason University - Interdisciplinary Center for Economic Science (ICES) ( email )

Vernon Smith Hall, 3434 Washington Blvd. North, 5t
Arlington, VA 22201
United States

Lin Xu

Central South University, School of Business, Students ( email )

Changsha, Hunan 410083
China

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