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CEOs' hometown connections and corporate risk-taking: Evidence from China

Author

Listed:
  • Fu, Fanjie
  • Fang, Jing
  • Zhang, Fan
  • Yao, Shujie
  • Ou, Jinghua

Abstract

Using hand-collected data on CEOs' hometown connections in Chinese A-share listed companies from 2009 to 2020, we find that such connections with suppliers are negatively associated with corporate risk-taking, reflected by the risk-taking behavior of CEOs with personal preference and self-interest. It is also found that the negative relationship between CEO hometown connections and corporate risk-taking is more pronounced for firms with greater economic policy uncertainty, firms in a period of tight monetary policy, firms with fewer analysts following, and firms with local CEOs, male CEOs, or CEOs without holding shares.

Suggested Citation

  • Fu, Fanjie & Fang, Jing & Zhang, Fan & Yao, Shujie & Ou, Jinghua, 2024. "CEOs' hometown connections and corporate risk-taking: Evidence from China," Emerging Markets Review, Elsevier, vol. 60(C).
    • Handle: RePEc:eee:ememar:v:60:y:2024:i:c:s1566014124000244
    DOI: 10.1016/j.ememar.2024.101129
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    More about this item

    Keywords

    Corporate risk-taking; CEO hometown connection; CEO preference; Uncertainty; Social networks;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation

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