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

61 Pages Posted: 9 Jan 2021 Last revised: 31 May 2022

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

Durham University Business School

Date Written: May 28, 2022

Abstract

Prior literature shows that CEO characteristics play an important role in explaining the firm’s decision to engage in corporate social responsibility (CSR). However, this literature overlooks one critical factor: CEO identification with their birthplaces. Based on social identity and legitimacy theories, we argue that birthplace identity has a real effect on social giving through CSR engagement. In a sample of 703 firms from multiple industries, we show that firms run by CEOs with high levels of birthplace identification (home CEOs), are associated with higher levels of CSR. The relation is more pronounced for CEOs with deeper home connections. CSR investments by home CEOs are also associated with increases in firm value.

Keywords: Corporate Social Responsibility; CEOs; legitimacy; social identity; birthplace identity

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 Identity and Corporate Social Responsibility (May 28, 2022). 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

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

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