CEO Social Minds and Green Loans

52 Pages Posted: 13 Jul 2021

See all articles by Tao Chen

Tao Chen

Nanyang Business School, Nanyang Technological University

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Jianfei Zhu

Arizona State University (ASU) - W.P. Carey School of Business

Date Written: May 20, 2021

Abstract

We examine the financial and real implications of bank CEOs’ social minds induced by female socialization. We find evidence of an economically sizable and statistically significant bank CEO-daughter effect in lending behaviours, controlling for borrower industry as well as bank characteristics. In specific, the “greenness” of a bank is significantly higher, when the lead bank CEO parents a first-born daughter compared to an otherwise lender. Looking at the specific lending contracts written by banks, we find that lead banks whose CEOs parent a first-born daughter provide loans with lower spread, fewer financial covenants, and less likely to require collateral, for borrowers with better CSR performance. Furthermore, we find that bank CEOs’ parenting experience with first-born daughters would predict borrowing firms’ future CSR performance positively, suggesting banks with CEOs raising a first-born daughter would promote the corporate social activities of borrowers.

Keywords: Bank CEOs, Female Socialization, Bank Greenness, Loan Terms, Corporate Social Responsibility

JEL Classification: G00, G21, G30, G32, J16, M14

Suggested Citation

Chen, Tao and Lin, Chen and Zhu, Jianfei, CEO Social Minds and Green Loans (May 20, 2021). Available at SSRN: https://ssrn.com/abstract=3871531 or http://dx.doi.org/10.2139/ssrn.3871531

Tao Chen (Contact Author)

Nanyang Business School, Nanyang Technological University ( email )

Singapore, 639798
Singapore

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Jianfei Zhu

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

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