CEOs' psychological trait and firms' adoption of blockchain technology: The role of hometown identity.

Abstract

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.