CEO's Hometown Identity and Corporate Social Responsibility

Journal of Management · 2023 · Volume 49 · Issue 7

DOI: 10.1177/01492063221104988

Abstract

This study documents the effect of CEO's identification with their hometown on corporate social responsibility (CSR). We propose that firms headquartered in their CEOs’ hometowns tend to do more CSR. This is because identification with their hometown activates CEOs’ altruistic tendency to be more prosocial and makes them more likely to have long-term goals, both of which are compatible with the nature of CSR. This hometown identity effect is stronger when the firm is more locally connected and is weaker when the firm is located in a region with more diverse dialects. Analyzing a large sample of publicly listed Chinese firms for 2009–2016, we found strong support for our predictions. The robustness of our findings is confirmed by a field survey, a difference-in-differences (DID) approach, the Heckman two-stage model, the impact threshold of confounding variables (ITCV), and alternative measures of CSR and CEO hometown identity.

Keywords

CEO hometown identity, upper echelons theory, CSR, local connection, dialect diversity

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