ABSTRACT This study examines whether politicians exhibit hometown favoritism in assigning preferential corporate income tax rates. We find that firms with hometown connections to incumbent provincial ...leaders experience favorable tax treatment. This effect is more pronounced when those leaders have strong hometown preferences and weaker when they have a strong incentive to seek promotion, suggesting that social incentives are the primary drivers of the effects on corporate tax benefits of hometown favoritism by politicians. Moreover, this effect is intensified when members of senior management have personal connections with the provincial leader. The mechanism test reveals that the provincial governments tend to qualify connected firms for preferential tax policies under their jurisdictions. Overall, our results suggest that hometown favoritism by politicians promotes tax benefits for business entities. Data Availability: Data are available from the public sources cited in the text. JEL Classification: H26; H71; M48.
Extending the theories of social and place identity, we predict that CEO hometown identity has a positive and significant influence on firm innovation. Our empirical evidence, from publicly traded ...firms in China during 2002–2016, suggests that a firm whose CEO's hometown is in the same province or city as the firm's headquarters tends to invest more in R&D and generate more patent applications. Our results are robust to the firm fixed effects and we use difference-in-differences analysis and instrument variable regressions to mitigate endogeneity concerns. CEOs' hometown identity still has a strong and positive impact on innovation after we control for measures of social capital of CEOs. We identify the mechanisms behind the positive relation between firm innovation and CEO hometown identity: hometown CEOs enjoy more support from the board of directors, they are more willing to take risks, and they are more likely to have long-term visions.
•CEO hometown identity has a positive and significant influence on firm innovation.•The difference-in-differences and instrument variable methods are used to mitigate endogeneity concerns.•Hometown CEOs enjoy more support from the directors, and they are more willing to take risks.•We also find that hometown CEOs are more likely to have long-term visions.
This qualitative study aimed to explore the unheard grief of young people following the 2019 social movement in Hong Kong. Sixteen participants were interviewed in-depth. Thematic analysis was ...conducted. Participants perceived Hong Kong as no longer the place they knew and expressed collective grief over the loss of their hometown. The understanding of their hometown was shattered amidst losses of freedom and justice. They grieved because of their unique relationships with Hong Kong and their identity as Hongkongers. This symbolic home-loss grief can be better understood at both emotional and existential levels. Findings suggest the importance of acknowledging and articulating this grief and a deeper understanding of the collective grief emerging from losses, in which people were connected by shared values.
Although there have been numerous studies on the relationship between corporate philanthropy and corporate financial performance (CFP), theoretical analysis focusing on the legitimacy-based mechanism ...and the moderating role of key executives’ psychological characteristics is scarce. Hometown attachment is a special form of place attachment in environmental psychology, which reflects people’s psychological attachment to their hometown and the state of maintaining an intimate emotional connection with it. Based on Scott’s three-pillar institutional perspective, this study traces its origins from the Chinese cultural context, and discusses the legitimacy basis of donations in the Chinese cultural context and why donations can improve CFP. On this basis, the moderating effect of the chairman’s hometown attachment on the corporate donation–performance relationship is empirically tested. Through logical deduction, hometown attachment may form legitimacy pressure to weaken the above relationship or leverage more legitimacy resources to strengthen such a relationship. Which effect dominates? The empirical results in this study of A-share listed firms from 2009 to 2018 show that the moderating role of hometown attachment is more in line with the resource theory than the former pressure theory. Further research shows that the government and consumers are important providers of these legitimacy resources. This study reveals the mechanism for legitimacy acquisition through corporate donations in the Chinese context and answers the question of what the chairman’s hometown attachment brings about to their donation performance, providing some inspiration for practice.
The relationship between transnational housing investment and homeownership status in destinations has received considerable attention. However, the direct causal link between both activities remains ...scant. This study introduces a new conceptual and empirical framework, quasi-transnationalism and integration nexus, to discuss the causal effects of hometown housing investment on the homeownership of rural migrants in urban destinations. The research also applies a national representative data in China, the National Migrants Population Dynamic Monitoring Survey (NMPDMS), to explore such causal effect. The results show that hometown housing investment has a significantly negative effect on homeownership in urban destinations, whereas the substitution effect of hometown housing investment exceeds the complementary. The conclusions are consistent when IV-LPM regression is applied to correct the potential endogeneity of migrants' hometown housing investment. There are some notable differentials across life cycle groups and origin-destination groups, those are, hometown housing investment produces a larger negative effect for the old generation than the new generation, while it also plays a more important role for migrants who moved within the same regions, but the effect on the migrants from Central and Western China to East China is the weakest among the four origin-destination groups. The possible mechanism is that hometown housing investment influences the housing tenure choice through affecting the return migration plan and housing purchase intent in urban destinations.
•This study explores the causal effect of hometown housing investment on homeownership of rural migrants in urban destination•A new framework named quasi-transnationalism and integration nexus is introduced to explore the direct effect•The research applies IV-LPM to correct the potential endogeneity of migrants’ hometown investment•The findings show that hometown housing investment has a negative effect on rural migrants’ homeownership in the destination•Return migration plan and housing purchase intent in urban destinations may serve as transmission channel
Despite accounting for a tenth of Mexico's population, the Mexican diaspora has relatively little impact in Mexican elections, with single digit voter turnout and legal restrictions to campaigning. ...Outreach by Mexican parties is limited and ad hoc in nature, failing to build permanent diaspora party networks. Instead, Hometown Associations (HTAs) are the primary vehicle for migrant political engagement. This paper examines the relationship of Mexican parties, HTAs, and Mexican migrants, using public records of international travel by Mexican party officials.
Prior research documents significant variation in audit outcomes based on individual auditors' demographic features, working experience, educational background, and social connections. This study ...examines whether individual auditors' early-life socioeconomic opportunities also affect audit practices. We expect that auditors from big cities have more access to socioeconomic opportunities and accumulate more human capital in early life, thus are more capable of providing high-quality audits after they start careers. Consistent with this hypothesis, we find that auditors from big cities make more audit adjustments to earnings compared with auditors from small towns. Additional tests suggest that this early-life effect on audit quality is moderated when auditors receive higher education or gain more auditing experience and is more pronounced in downward adjustments than in upward adjustments. We also find a fee premium for auditors from big cities. Overall, this paper provides evidence that auditors’ early-life socioeconomic opportunities have a far-reaching influence on audit quality.
The relationship between hometown attachment (HA) and corporate social responsibility (CSR) is a topic to be explored in depth. We measured the HA by the Chinese diaspora background and the immigrant ...culture of the ultimate controllers of the firm and employed the sample of Chinese non-financial private-listed companies in Shanghai and Shenzhen from 2003 to 2019 to investigate the impact of the HA on overseas Chinese entrepreneurs on CSR. We found that the HA of the overseas Chinese ultimate controller significantly increases the level of CSR, and this promoting effect rises when the firm ultimately held by the overseas Chinese entrepreneur is registered in the expatriate hometown. Our further analysis found that the personal characteristics of overseas Chinese entrepreneurs and regional cultural differences have a moderating effect on the above relationship. In particular, we found that overseas Chinese entrepreneurs who are women or with lower academic qualifications have a stronger sense of CSR. Moreover, in areas with low marketization or a high level of social trust, HA of overseas Chinese entrepreneurs plays a more active role in CSR. The results remain robust after the robustness test and the endogenous test. The conclusion of this study not only highlights the impact of psychological factors on the level of CSR but also provides a reference for the study of the decision-making behavior of overseas Chinese entrepreneurs.
While prior conceptualizations acknowledge that CEOs’ psychological traits influence firm outcomes, it remains unknown whether and how hometown identity as an important character of CEOs affects ...corporate risk-taking. Drawn upon place identity theory, our study investigates whether CEO hometown identity mitigates or encourages firms' risk-taking. Using a sample of Chinese listed firms between 2008 and 2020, we show that CEO hometown identity significantly reduces corporate risk-taking, and this finding holds after a battery of robustness checks. Our cross-sectional analyses further reveals that this effect is stronger for female CEOs but weaker for CEOs with international experiences. Additionally, we demonstrate that the reduction in firm risk-taking is achieved through lower financial leverage, enhanced investment efficiency, and reduced earnings management. Collectively, by highlighting the importance of CEO hometown identity, our study furthers the understanding of how CEO psychological traits influence corporate risk-taking.
•CEO hometown identity significantly lowers corporate risk-taking.•The focal effect is more pronounced for female CEOs, but less so for CEOs with foreign experiences.•The decline in firm risk-taking is realized through reduced financial leverage, improved investment efficiency, and decreased earnings management.•The study contributes to a more nuanced understanding of the dynamics of CEO traits in shaping firm risk-taking.
This study investigates the effects of CEO hometown ties on corporate tax avoidance. The results show that CEO hometown ties to local government officials have a significantly positive impact on tax ...avoidance for private firms in China. We also find that the hometown ties effect is more pronounced in cities with weak public governance and in cities whose municipal Party committee secretaries are promoted from the same city, whereas the effect is weak in cities whose municipal Party committee secretaries are transferred from other places. In summary, our results suggest that hometown ties as an important political resource can facilitate connected private firms to obtain more economic resources from government.
