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CEO career concerns and ESG investments

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  • Kim, Kihun
  • Kim, Tae-Nyun

Abstract

This paper examines whether CEO (Chief Executive Officer) career concerns affect ESG (Environmental, Social, and Governance) investments and finds a positive relationship between them. More specifically, we find empirical evidence that CEOs with shorter tenure, more outside opportunities, and more long-term oriented compensation structure are more likely to invest in ESG investments as they have greater career concerns. Furthermore, we find that this positive relationship between CEO career concerns and ESG investments is less evident in overpaid CEOs or states that adopt Corporate Opportunity Waivers (COW) law. These results indicate that extrinsic motivation can affect ESG investments when CEOs face significant career concerns.

Suggested Citation

  • Kim, Kihun & Kim, Tae-Nyun, 2023. "CEO career concerns and ESG investments," Finance Research Letters, Elsevier, vol. 55(PA).
    • Handle: RePEc:eee:finlet:v:55:y:2023:i:pa:s1544612323001927
    DOI: 10.1016/j.frl.2023.103819
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    References listed on IDEAS

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    Cited by:

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    5. Wang, Zhen & Tang, Pei, 2024. "Substantive digital innovation or symbolic digital innovation: Which type of digital innovation is more conducive to corporate ESG performance?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 1212-1228.
    6. Wang, Shuangjin & Zhang, Xiaoqian & Cebula, Richard J. & Foley, Maggie, 2024. "Cross-shareholding, Managerial capabilities, and Strategic risk-taking in enterprises: A game or a win-win?," Finance Research Letters, Elsevier, vol. 62(PB).
    7. Lin, Shiwei & Zhang, Yiru & Wang, Yanuo & Geng, Haipeng, 2024. "The impact of CEO reputation on ESG performance in varying managerial discretion contexts," Finance Research Letters, Elsevier, vol. 70(C).
    8. Zhang, Kai & Wan, Shan & Zhou, Yuehui, 2024. "Executive compensation, internal governance and ESG performance," Finance Research Letters, Elsevier, vol. 66(C).
    9. Qiao, Penghua & Zhao, Yuying & Fung, Anna & Fung, Hung-Gay, 2025. "How digital leadership guides ESG sustainability," Research in International Business and Finance, Elsevier, vol. 73(PB).
    10. Liu, Xiaoqian & Cifuentes-Faura, Javier & Zhao, Shikuan & Wang, Long, 2024. "The impact of government environmental attention on firms’ ESG performance: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    11. Zhang, Yanan & Zhang, Xiaoyu, 2024. "Top management team functional diversity and ESG performance," Finance Research Letters, Elsevier, vol. 63(C).

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