Drinking into Friends: Alcohol Drinking Culture and CEO Social Connections

41 Pages Posted: 11 Oct 2022

See all articles by Jianxin Wang

Jianxin Wang

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

Cailing Huang

Central South University

Lin Xu

Shandong University

Junhuan Zhang

Beihang University (BUAA) - School of Economic and Management Science

Abstract

The impacts of a CEO’s social connections to a firm have received much attention. However, less is known 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. Besides, we find CEO’s inter-firm but not intra-firm social connections established from alcohol drinking can help firms acquire more trade credit.

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

Suggested Citation

Wang, Jianxin and Huang, Cailing and Xu, Lin and Zhang, Junhuan, Drinking into Friends: Alcohol Drinking Culture and CEO Social Connections. Available at SSRN: https://ssrn.com/abstract=4244601 or http://dx.doi.org/10.2139/ssrn.4244601

Jianxin Wang

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

Cailing Huang

Central South University ( email )

Changsha, 410083
China

Lin Xu (Contact Author)

Shandong University ( email )

27 Shanda Nanlu
South Rd.
Jinan, SD 250100
China

Junhuan Zhang

Beihang University (BUAA) - School of Economic and Management Science ( email )

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