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.
•We find public climate concern negatively affects ESG disclosure.•Increased public climate concern raises corporate risk, harming ESG performance.•Firms with less environmental regulatory pressure ...are more susceptible to the negative impact of climate concerns on ESG.•The negative effect is mitigated by strong CEO hometown identity and improved resource access.
Using a textual analysis approach, we investigate the impact of public climate concern on corporate ESG disclosure. The results reveal a significant negative correlation between the two. Our mechanistic analysis indicates that the exacerbation of public climate concerns amplifies firms' risk exposure, which confirms the negative effect on ESG performance. The negative effects of public climate concerns on ESG disclosure is heightened for companies with weaker CEO hometown identity, higher resource costs, lower environmental regulatory pressures, and colder climates in northern China. These results emphasize the significance of public climate concerns as a critical external factor affecting corporate ESG disclosure.
Research question/issue
This study investigates whether local CEOs make more efficient investment decisions in labor.
Research findings/insights
We find that firms hiring local CEOs are associated ...with lower deviations of labor investment from the level justified by economic fundamentals, that is, higher labor investment efficiency. More importantly, we explore the role of information advantage, corporate governance, and CEO cultural background in shaping the relationship. We find the effect of CEO locality is more pronounced when firms have higher levels of local business integration, poorer corporate governance, and higher agency costs. Moreover, the impact of CEO locality is stronger when CEOs' hometowns have stronger unselfishness culture, patriotism culture, and Confucian culture. Our results are robust to a battery of endogeneity tests and robustness checks.
Theoretical/academic implications
Our study reveals that CEO locality, as one of the idiosyncratic top executive styles, can hinder managers from myopic behavior by investing more efficiently in labor, as a key factor of production and a major internal stakeholder, for a firm's success.
Practitioner/policy implications
Given human capital is considered the primary source of firms' competitive advantage, our study provides useful insights and managerial implications for firms to consider the impact of the idiosyncratic top executive styles as one of the noncontractual factors on firms' employment decisions.
Purchasing a house in origin cities or towns has become a new trend in housing trajectories for rural migrants in China, whereas previous studies focus mainly on determinants of housing tenure for ...rural migrants in urban destinations. Using a recent national survey called the National Migrants Population Dynamic Monitoring Survey (NMPDMS), the present study applies a recursive multivariate probit model to explore the determinants of migrants' housing trajectories in the nexus of quasitransnationalism and integration. The results indicate that ties to urban destinations and ties to the hometown have a significant effect on housing attainments between urban destinations and the hometown. Rural migrants with closer ties to urban destinations and weaker ties to the hometown are more likely to be homeowners in the urban destinations. Conversely, they are more prone to make housing investments in the hometown. Both hometown housing activities of having bought a house in the origin city or town and having rebuilt a house in the origin village have significantly negative effects on homeownership in urban destinations, and the housing activity of having rebuilt a house in the origin village also has a significant negative effect on housing purchase in the origin city or town.
The impact of CEOs' psychological traits on firms' decision-making has been explored by many psychological researchers. What's more, the CEO hometown identity, as one of the most fundamental ...psychological traits, has drawn increasing attention from the psychological literature. Firms' adoption of blockchain technology plays an innovative and efficient role in firms' strategic transformation. Thus, it is necessary to investigate the relationship between CEOs' psychological traits and firms' adoptions of blockchain technology from the perspective of hometown identity. To examine the impact of the CEO hometown identity on firms' adoption of blockchain technology, this paper manually collects information about the CEO hometown identity and constructs the index of firms' adoption of blockchain technology based on the textual analysis of firms' annual reports. Based on the theory about the psychology of identity, this paper constructs the theoretical hypothesis about the relationship between CEO hometown identity and firms' adoption of blockchain technology. Then, this paper uses a two-way fixed effect regression model to estimate the impact of the CEO hometown identity on firms' adoption of blockchain technology based on the panel data of Chinese A-share non-financial listed firms during 2008–2019. The research results show that: (1) the CEO hometown identity has a positive effect on firms' adoption of blockchain technology. (2) For firms with severe financing constraints and State-owned enterprises (SOEs), the positive effect of the CEO hometown identity on firms' adoption of blockchain technology is more prominent. (3) Our benchmark results still hold after a series of robustness checks, including altering the measurement of the CEO hometown identity, altering the sample, adding CEO-specific control variables, and altering the logit regression model. Based on the above-mentioned findings, this paper not only sheds new light on the power of CEOs' psychological trait but also deepens the understanding about theories of the psychology of identity.
International migration profoundly reshapes the urban landscape in sending and receiving countries. Compared to ethnic enclaves in migrant-receiving metropolises and remittance houses in sending ...communities, we know little about systematic urban changes led by emigration states. In this article, based on three months of fieldwork in a migrant hometown in China, I argue that the dispersion of emigrants per se does not make its urban space inherently 'diasporic'. Rather, a 'diasporic place' can be strategically constructed by local sociopolitical actors, a process I conceptualise as 'diasporic placemaking'. To create an international city branding and boost the consumption-based urban economy, the local state promotes Western architectural forms and imagines globalisation as a new way of life. To understand how migrants and local residents make sense of diasporic placemaking, I analyse deep-running tensions between their diverse self-perceptions and state construction. Instead of an innocent project, diasporic placemaking is replete with ambitions, achievements, and anxieties in post-socialist China's march towards modernity, progress, and prosperity. To advance the constructivist momentum in diaspora studies, I explore how diaspora construction is realized and contested in urban transformations while shedding light on how migrant spaces are valorised and performed by local actors for economic and symbolic purposes.
•CEOs’ hometown identity significantly lowers the consumption of excess perks.•CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess ...perks.•The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on controlling agency costs.
Our study examines whether CEOs’ hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs’ hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.
•Firms registered in governors’ hometowns may have more investment expenditures.•Governances’ social identity affects corporate investment.•Chinese-listed firm data reveals the factors influencing ...hometown favoritism.•Governors prioritize their administrative duties over hometown favoritism.•Increased hometown firm investments lead to investment inefficiency.
We investigate the effects of governors’ hometown favoritism on the corporate investments of Chinese listed firms. Exploiting the exogenous distribution of governors’ tenure in a difference-in-differences research design, we find that firms in an incumbent governor's hometown make higher investments by 10.26%. This favoritism effect is more pronounced when any of the following are true about a governor's hometown: has a culture background of high collectivism, has strong clan culture, uses a minor local dialect, or if the governor has strong clan ties. Additional analyses rule out the social ties generated through living or working experiences as an alternative explanation. Neither political connections nor self-interest incentives explain the effects of hometown favoritism. Furthermore, the increased investments are overall detrimental for investment efficiency.Our study contributes to the literature by applying the social identity theory in corporate research and provides novel evidence on how politicians’ social identity affects corporate investment.
