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- Title
Prosocial CEOs, corporate policies, and firm value.
- Authors
Feng, Mei; Ge, Weili; Ling, Zhejia; Loh, Wei Ting
- Abstract
This paper examines how chief executive officers' (CEOs') prosocial tendency influences corporate policies and firm value. We use individuals' involvement with charitable organizations as a proxy for prosocial tendency. We find that, compared to firms with non-prosocial CEOs, firms with prosocial CEOs have lower executive subordinate turnover, implement more employee-friendly policies, experience higher customer satisfaction, and engage in more socially responsible activities. We also find that firms with prosocial CEOs have higher value and lower risk, partly due to the corporate policies adopted by prosocial CEOs. These results are corroborated when we compare changes in corporate policies and firm value around different types of CEO turnovers: a prosocial CEO replacing a non-prosocial CEO versus other types. Our results thus suggest that prosocial CEOs are more likely to make corporate decisions that benefit others and increase firm value.
- Subjects
ENTERPRISE value; CORPORATE governance; CHIEF executive officers; EXECUTIVE compensation; CUSTOMER satisfaction; CHARITIES
- Publication
Review of Accounting Studies, 2024, Vol 29, Issue 2, p1854
- ISSN
1380-6653
- Publication type
Article
- DOI
10.1007/s11142-023-09761-0