A CEO’s Childhood Experience of Natural Disaster and Corporate Social Responsibility: An Abstract

Abstract

The effects of CEOs’ childhood experiences of natural disaster on their corporate-level decisions has recently become the subject of growing interest among scholars. Although recent research finds that CEOs with natural disaster in their childhood tend to be more sensitive to the consequences of taking risks and implement more risk-averse and conservative financial policies (e.g., Bernile et al., 2017; Chen et al., 2021), little is known about the influence of this experience on corporate social responsibility (CSR). Drawing on upper echelons theory, heterogeneities in corporate actions and outcomes are the result of differences among corporate executives (Hambrick & Mason, 1984). This study contributes to the literature in multiple ways. First, this study adds to the stream of research that examines the effect of a CEO’s childhood experience of natural disaster on post-disaster decisions. While the majority of existing literature has largely focused on the influence of a CEO’s experience of natural disasters on corporate financial policy (e.g., Bernile et al., 2017; Chen et al., 2021), this study expands the scope of outcome to the firm’s CSR performance. Second, this study enriches the CSR literature that has shown that a CEO’s characteristics affect the firm’s commitment to CSR (e.g., Chen et al., 2019). By demonstrating how a CEO’s childhood experience of natural disaster influences a firm’s CSR performance, this study advances the understanding of the influence of top executives’ characteristics on corporate policies and practices, anchored by the upper echelons theory. Lastly, by identifying the moderating effects of the levels of the CEO’s career horizon and social capital, this study provides a profound understanding of the phenomenon of a firm’s CSR as a result of the CEO’s childhood natural disaster experience. Using archival data, the findings demonstrate that a CEO’s childhood exposure to natural disaster has a positive influence on the firm’s CSR performance and emphasize that the level of CEO career horizon and the level of social capital in the community moderate the effect of a CEO’s childhood experience of natural disaster on the firm’s CSR performance. Theoretical and managerial implications are discussed.