Local Boy Does Good: CEO Birthplace Bias and Corporate Social Responsibility

57 Pages Posted: 9 Jan 2021

See all articles by Zicheng Lei

Zicheng Lei

King's College London

Dimitris Petmezas

Durham University Business School

P. Raghavendra Rau

University of Cambridge

Chen Yang

Surrey Business School

Date Written: November 20, 2020

Abstract

We examine the effect of CEO birthplace bias on firm corporate social responsibility (CSR) activities. CEOs with strong place identities, heading firms located in their home birth counties, are associated with higher levels of CSR at their firms. The relation is more pronounced for CEOs with deeper home connections. CSR activities by home CEOs are associated with significant increases in firm value. The effect persists after controlling for corporate governance metrics. Additionally, home CEOs do not appear to extract private benefits, either directly or indirectly, from these activities. Overall, non-monetary emotional place identity channels appear to affect CSR.

Keywords: Corporate social responsibility, CEOs, home bias, psychology, environment, community

JEL Classification: M14, G34, G39

Suggested Citation

Lei, Zicheng and Petmezas, Dimitris and Rau, P. Raghavendra and Yang, Chen, Local Boy Does Good: CEO Birthplace Bias and Corporate Social Responsibility (November 20, 2020). Available at SSRN: https://ssrn.com/abstract=3718687 or http://dx.doi.org/10.2139/ssrn.3718687

Zicheng Lei

King's College London ( email )

Bush House
30 Aldwych, Strand
London, WC2B 4BG
United Kingdom

Dimitris Petmezas (Contact Author)

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

P. Raghavendra Rau

University of Cambridge ( email )

Cambridge Judge Business School
Trumpington Street
Cambridge, Cambridgeshire CB21AG
United Kingdom
3103626793 (Phone)

HOME PAGE: http://www.raghurau.com/

Chen Yang

Surrey Business School ( email )

Guildford, Surrey GU2 8DN
United Kingdom

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