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

Nguyen, Duc Duy; Hagendorff, Jens; Eshraghi, Arman

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Date

01/01/2018

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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.

Citation

Nguyen , D D , Hagendorff , J & Eshraghi , A 2018 , ' Does a CEO's cultural heritage affect performance under competitive pressure? ' , Review of Financial Studies , vol. 31 , no. 1 , pp. 97-141 . https://doi.org/10.1093/rfs/hhx046

Publication

Review of Financial Studies

Status

Peer reviewed

DOI

https://doi.org/10.1093/rfs/hhx046

ISSN

0893-9454

Type

Journal article

Rights

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

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University of St Andrews Research

URI

http://hdl.handle.net/10023/17727