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’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
ISSN
0893-9454Type
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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