CEO Geographic Origin and Corporate Environmental Irresponsibility

Abstract

Although research on place attachment and place identification shows that place of origin greatly influences people’s cognitions, emotions, and behaviors, strategic management scholars have paid limited attention to how CEO place of origin influences strategic decision making. Building upon theories and studies about place attachment and place identification, we explain why Chinese CEOs are especially likely to have strong home province attachment and home province identification. We then predict that a Chinese firm’s corporate environmental irresponsibility (CEIR) in its headquarters province will be reduced if the province is the CEO’s home province. In addition, we propose that the negative effect of CEO home province on CEIR will be stronger when the CEO’s home province has better scenic quality but weaker when the CEO’s home province has more pollution. Moreover, we predict that the negative effect of CEO home province on CEIR will be strengthened by the CEO’s board and political appointments in the home province. Using longitudinal data (2008-2018) covering 637 Chinese public firms in 18 high-pollution industries, we find strong support for our hypotheses. Our findings are robust to alternative measures of key variables, units of analysis, methods of estimation, and the potential presence of omitted variables.