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CEO nonlocality and corporate misbehavior: a social identity perspective

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  • Wang, Tao
  • Ye, Yongqing
  • Xia, Jun
  • Deng, Xiaoyang

Abstract

CEO locality—geographic origins of CEOs—shapes corporate conduct, but its mechanisms remain underexplored. Drawing on social identity theory, we propose outsider self-restraint as a novel mechanism, arguing that firms led by nonlocal CEOs are less prone to misbehavior compared to local CEOs. This self-restraint is particularly pronounced among CEOs with limited power—those who do not hold the dual role of CEO and board chair, and those with limited reputational capital—CEOs who have not received professional awards. The effect is most salient for CEOs who possess neither board duality nor reputational accolades, especially in institutional contexts characterized by tight cultural norms and advanced legal development. Using a longitudinal dataset of publicly listed Chinese firms, we employ a three-way analytical approach and find empirical support for most of our hypotheses. We contribute to the literature on CEO nonlocality and corporate misbehavior by identifying self-restraint as a key behavioral mechanism underlying ethical firm leadership.

Suggested Citation

  • Wang, Tao & Ye, Yongqing & Xia, Jun & Deng, Xiaoyang, 2026. "CEO nonlocality and corporate misbehavior: a social identity perspective," Journal of Business Research, Elsevier, vol. 214(C).
    • Handle: RePEc:eee:jbrese:v:214:y:2026:i:c:s0148296326003000
    DOI: 10.1016/j.jbusres.2026.116265
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