Abstract

ABSTRACT This paper investigates whether CEOs working near their birthplace (i.e. local CEOs) commit less fraud. Using data of Chinese listed firms, where local social network is important for business, we find that local CEOs are associated with less fraud commitment. Cross-sectional analyses show that the inhibitory effect is weakened when the CEOs have poverty or oversea experiences. Such impact is more pronounced when the firms are owned by non-state owners or have weaker internal control.

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