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CEO Ability and Corporate Social Responsibility

Author

Listed:
  • Yuan Yuan

    (Xi’an Jiaotong University
    City University of Hong Kong)

  • Gaoliang Tian

    (Xi’an Jiaotong University)

  • Louise Yi Lu

    (Australian National University)

  • Yangxin Yu

    (City University of Hong Kong)

Abstract

This study examines the impact of chief executive officer (CEO) ability on firms’ corporate social responsibility (CSR) performance. We find that firms’ CSR performance increases with CEO ability. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. We further find that the positive relation between CEO ability and CSR is weakened for CEO who is also the chair of the board and for CEO who is close to retirement; and is weakened when the CSR emphasis exerted by a firm’s external environment is high. Our results are robust after controlling for firm fixed effects and to the use of multiple measures of CSR performance and CEO ability. Overall, our evidence is consistent with our conjecture that more able CEOs have less career concerns so that these CEOs are more willing to undertake long-term investments in socially beneficial activities, leading to better CSR performance.

Suggested Citation

  • Yuan Yuan & Gaoliang Tian & Louise Yi Lu & Yangxin Yu, 2019. "CEO Ability and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 157(2), pages 391-411, June.
    • Handle: RePEc:kap:jbuset:v:157:y:2019:i:2:d:10.1007_s10551-017-3622-3
    DOI: 10.1007/s10551-017-3622-3
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