Publication Type
Journal Article
Version
submittedVersion
Publication Date
3-2023
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.
Keywords
Prosocial tendency, Corporate policies, Employee turnover, Customer satisfaction, Corporate social responsibility, Firm value
Discipline
Accounting | Corporate Finance | Leadership Studies
Research Areas
Corporate Governance, Auditing and Risk Management
Publication
Review of Accounting Studies
First Page
1
Last Page
66
ISSN
1380-6653
Identifier
10.1007/s11142-023-09761-0
Publisher
Springer
Citation
FENG, Mei; GE, Weili; LING, Zhejia; and LOH, Wei Ting.
Prosocial CEOs, corporate policies, and firm value. (2023). Review of Accounting Studies. 1-66.
Available at: https://ink.library.smu.edu.sg/soa_research/2008
Copyright Owner and License
Authors
Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.
Additional URL
https://doi.org/10.1007/s11142-023-09761-0