Projects per year
Abstract
We investigate whether and how managerial risk-tolerance at the individual level affects corporate social responsibility (CSR) performance at company level. We use CEO aviation training as an observable ex-ante measure of CEO risk-tolerance. Contrary to a commonly held view, we show that firms led by CEOs with pilot status exhibit lower CSR performance. This finding holds even after controlling for CEO pay-performance incentives, military experience, overconfidence and other CEO and firm characteristics that prior studies document as affecting CSR performance. In further cross-sectional tests, we show that when a firm is R&D intensive, belongs to a high-tech industry, or faces fiercer product market competition, the negative effect of CEO risk-tolerance on CSR performance is more pronounced, suggesting that CSR may act as an insurance or risk-hedging tool. Overall, we provide evidence that risk-tolerance of CEO plays a significant role in shaping CSR performance.
| Original language | English |
|---|---|
| Number of pages | 16 |
| Journal | Applied Economics |
| DOIs | |
| Publication status | Online published - 7 Mar 2022 |
Funding
Hrazdil acknowledges financial support from the Social Sciences and Humanities Research Council of Canada [grant number 31-R640084]. Kim acknowledges partial financial support from the GRF of Hong Kong SAR government [grant number: 9042767].
Research Keywords
- Corporate social responsibility performance
- managerial risk-tolerance
- pilot
- CEO
- UPPER ECHELONS
- FIRM PERFORMANCE
- RISK-AVERSION
- CSR
- IMPACT
- CEOS
- PAY
Fingerprint
Dive into the research topics of 'How do chief executive officers with pilot status navigate through corporate social responsibility?'. Together they form a unique fingerprint.Projects
- 1 Finished
-
GRF: Business Group Affiliation, Internal Organizational Structure, and Investment Efficiency: An International Investigation
KIM, J. B. (Principal Investigator / Project Coordinator)
1/01/20 → 29/12/23
Project: Research