Local Boy Does Good: The Effect of CSR Activities on Firm Value

69 Pages Posted: 7 Oct 2023

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

University of Glasgow

Abstract

Home CEOs, CEOs who lead companies in their hometowns, are more involved in corporate social responsibility (CSR) activities than other CEOs. These socially responsible actions benefit the company, with home CEOs’ companies seeing better employee productivity, higher sales, and bigger profit margins. Notably, only these companies earn higher stock returns during the 2008-2009 financial crisis and the COVID-19 pandemic. Our results imply that the CEO’s personal connections to their community can influence the success of their company’s social efforts, suggesting that just being socially responsible is not enough to boost trust and company value.

Keywords: Corporate Social Responsibility (CSR), CEOs, Birthplace Identity, Trust, Firm Value

Suggested Citation

Lei, Zicheng and Petmezas, Dimitris and Rau, P. Raghavendra and Yang, Chen, Local Boy Does Good: The Effect of CSR Activities on Firm Value. Available at SSRN: https://ssrn.com/abstract=4592900 or http://dx.doi.org/10.2139/ssrn.4592900

Zicheng Lei

King's College London ( email )

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

Dimitris Petmezas

Durham University Business School ( email )

Mill Hill Lane
Durham, DH1 3LB
United Kingdom

P. Raghavendra Rau (Contact Author)

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

University of Glasgow ( email )

Adam Smith Business School
Glasgow, Scotland G12 8LE
United Kingdom

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