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Hometown CEOs and corporate financialization✰

Author

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  • Lin, Cuiliang
  • Long, Yue'e

Abstract

Corporate financialization refers to the process in which non-financial firms focus on financial activities for short-term gains, potentially harming core business activities of the company and causing economic bubble risks. This paper investigates the impact of hometown CEOs on corporate financialization. Based on data from Chinese listed companies, we find that hometown CEOs are less likely to conduct corporate financialization. Furthermore, we identify that hometown CEOs reduce corporate financialization by alleviating financial constraints and decreasing short-sighted orientation. Moreover, the relationship is more pronounced when CEOs possess more discretionary power and enhanced capabilities.

Suggested Citation

  • Lin, Cuiliang & Long, Yue'e, 2025. "Hometown CEOs and corporate financialization✰," Finance Research Letters, Elsevier, vol. 76(C).
    • Handle: RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002375
    DOI: 10.1016/j.frl.2025.106973
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    More about this item

    Keywords

    Hometown identity; Financial constraints; Short-sighted orientation; Corporate financialization;
    All these keywords.

    JEL classification:

    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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