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Journal of Business Ethics

, Volume 157, Issue 2, pp 391–411 | Cite as

CEO Ability and Corporate Social Responsibility

  • Yuan YuanEmail author
  • Gaoliang Tian
  • Louise Yi Lu
  • Yangxin Yu
Original Paper

Abstract

This study examines the impact of chief executive officer (CEO) ability on firms’ corporate social responsibility (CSR) performance. We find that firms’ CSR performance increases with CEO ability. Specifically, firms with more able CEOs are associated with more socially responsible activities and fewer socially irresponsible activities, and are associated with more stakeholder CSR rather than third-party CSR. We further find that the positive relation between CEO ability and CSR is weakened for CEO who is also the chair of the board and for CEO who is close to retirement; and is weakened when the CSR emphasis exerted by a firm’s external environment is high. Our results are robust after controlling for firm fixed effects and to the use of multiple measures of CSR performance and CEO ability. Overall, our evidence is consistent with our conjecture that more able CEOs have less career concerns so that these CEOs are more willing to undertake long-term investments in socially beneficial activities, leading to better CSR performance.

Keywords

CEO ability Career concerns Corporate social responsibility Long-term investment CSR emphasis 

Notes

Acknowledgements

We thank R. Edward Freeman (the editor), Michelle Greenwood (the editor), and anonymous referees. We also thank Gary Monroe, Greg Shailer and the workshop participants at Xi’an Jiaotong University and the AAA 2016 Annual Meeting for helpful comments. Gaoliang Tian acknowledges financial support for this project from National Natural Science Foundation of China (71372163) and Special Scientific Research Plan of Education Department of Shaanxi Provincial Government of China (16JK2056).

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Copyright information

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Authors and Affiliations

  1. 1.Department of Accounting and FinanceXi’an Jiaotong UniversityXi’anChina
  2. 2.Department of AccountancyCity University of Hong KongKowloonHong Kong
  3. 3.Research School of AccountingAustralian National UniversityCanberraAustralia

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