Does a CEO's cultural heritage affect performance under competitive pressure?

Duc Duy Nguyen; Jens Hagendorff; Arman  Eshraghi

doi:10.1093/rfs/hhx046

Does a CEO's cultural heritage affect performance under competitive pressure?

Duc Duy Nguyen, Jens Hagendorff, Arman Eshraghi

Centre for Responsible Banking and Finance

Research output: Contribution to journal › Article › peer-review

71 Citations (Scopus)

5 Downloads (Pure)

Abstract

We exploit variation in cultural heritage across CEOs who are the children or grandchildren of immigrants to demonstrate that the cultural origins of CEOs matter for corporate outcomes. Following shocks to industry competition, firms led by CEOs who are second- or third-generation immigrants are associated with a 6.2% higher profitability than the average firm. This effect weakens over successive immigrant generations and cannot be detected for top executives other than the CEO. Additional analysis attributes this effect to various cultural values that prevail in a CEO’s ancestral country of origin.

Original language	English
Pages (from-to)	97-141
Number of pages	45
Journal	Review of Financial Studies
Volume	31
Issue number	1
Early online date	19 May 2017
DOIs	https://doi.org/10.1093/rfs/hhx046
Publication status	Published - 1 Jan 2018

Keywords

CEOs
Cultural values
Corporate investments
Performance
Competition

Access to Document

10.1093/rfs/hhx046

culture_fin
Copyright © 2017, the Author(s). Published by Oxford University Press on behalf of The Society for Financial Studies. This work is made available online in accordance with the publisher’s policies. This is the author created, accepted version manuscript following peer review and may differ slightly from the final published version. The final published version of this work is available at https://doi.org/10.1093/rfs/hhx046
Accepted author manuscript, 1.55 MB

Cite this

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title = "Does a CEO's cultural heritage affect performance under competitive pressure?",

abstract = "We exploit variation in cultural heritage across CEOs who are the children or grandchildren of immigrants to demonstrate that the cultural origins of CEOs matter for corporate outcomes. Following shocks to industry competition, firms led by CEOs who are second- or third-generation immigrants are associated with a 6.2% higher profitability than the average firm. This effect weakens over successive immigrant generations and cannot be detected for top executives other than the CEO. Additional analysis attributes this effect to various cultural values that prevail in a CEO{\textquoteright}s ancestral country of origin.",

keywords = "CEOs, Cultural values, Corporate investments, Performance, Competition",

author = "Nguyen, {Duc Duy} and Jens Hagendorff and Arman Eshraghi",

year = "2018",

month = jan,

day = "1",

doi = "10.1093/rfs/hhx046",

language = "English",

volume = "31",

pages = "97--141",

journal = "Review of Financial Studies",

issn = "0893-9454",