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Doing Good Business by Hiring Directors with Foreign Experience

Author

Listed:
  • Jian Zhang

    (Southwestern University of Finance and Economics)

  • Dongmin Kong

    (Zhongnan University of Economics and Law
    Huazhong University of Science and Technology)

  • Ji Wu

    (Massey University – Albany Campus)

Abstract

Using a manually collected dataset on the overseas experiences of directors of Chinese listed firms, we examine the effects of returnee directors on firms’ corporate social responsibility (CSR) engagement. Our results show that returnee directors significantly improve their firms’ CSR engagement. The positive relationship between the percentage of returnee directors and CSR engagement is more significant when a firm is in a competitive industry, when a firm has no government ownership, when a firm’s CEO is not politically connected, and when a firm’s CEO is older. Furthermore, we find that only long-term foreign professional or academic experience matters, whereas short-term visiting experience does not. Finally, our results are robust after controlling for endogeneity. Therefore, this paper offers clear policy implications by suggesting that hiring more returnees as corporate directors is an efficient way to enhance firms’ CSR, which may be of particular interest to regulators in emerging markets.

Suggested Citation

  • Jian Zhang & Dongmin Kong & Ji Wu, 2018. "Doing Good Business by Hiring Directors with Foreign Experience," Journal of Business Ethics, Springer, vol. 153(3), pages 859-876, December.
    • Handle: RePEc:kap:jbuset:v:153:y:2018:i:3:d:10.1007_s10551-016-3416-z
    DOI: 10.1007/s10551-016-3416-z
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