Does CEO cultural heritage affect performance under competitive pressure?

Duc Duy Nguyen; Jens Hagendorff; Arman Eshraghi

doi:10.1093/rfs/hhx046

Does CEO cultural heritage affect performance under competitive pressure?

Duc Duy Nguyen, Jens Hagendorff, Arman Eshraghi

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

Abstract

We exploit variation in cultural heritage across CEOs who are children and 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, is not detected for top executives other than the CEO, and can be explained by specific cultural values that prevail in the CEO’s country of origin. Our paper offers novel insights on the interactions between informal institutions and corporate outcomes.

Original language	English
Pages (from-to)	97-141
Journal	The 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 - Jan 2018

Keywords

CEOs
cultural values
competition
performance
corporate investments

Access to Document

10.1093/rfs/hhx046

NguyenEtalRFS2017DoesCEOCulturalHeritage
This is a pre-copyedited, author-produced PDF of an article accepted for publication in The Review of Financial Studies following peer review. The version of record [Duc Duy Nguyen, Jens Hagendorff, Arman Eshraghi; Does a CEO’s Cultural Heritage Affect Performance under Competitive Pressure?, The Review of Financial Studies, , hhx046 is available online at: https://doi.org/10.1093/rfs/hhx046
Accepted author manuscript, 1.43 MB

Cite this

@article{4ede61ae871c43fb925d294b025bb581,

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

abstract = "We exploit variation in cultural heritage across CEOs who are children and 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, is not detected for top executives other than the CEO, and can be explained by specific cultural values that prevail in the CEO{\textquoteright}s country of origin. Our paper offers novel insights on the interactions between informal institutions and corporate outcomes.",

keywords = "CEOs, cultural values, competition, performance, corporate investments",

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

year = "2018",

month = jan,

doi = "10.1093/rfs/hhx046",

language = "English",

volume = "31",

pages = "97--141",

journal = "The Review of Financial Studies",

issn = "0893-9454",