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Does a CEO’s Cultural Heritage Affect Performance under Competitive Pressure?

Research output: Contribution to journalArticle

Duc Duy Nguyen, Jens Hagendorff, Arman Eshraghi

Original languageEnglish
Pages (from-to)97-141
Number of pages45
JournalREVIEW OF FINANCIAL STUDIES
Volume31
Issue number1
Early online date19 May 2017
DOIs
Publication statusPublished - 21 Jan 2018

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Abstract

We exploit variation in the cultural heritage across U.S. CEOs who are the children or grandchildren of immigrants to demonstrate that the cultural origins of CEOs matter for corporate outcomes. Following shocks to industry competition, firms led by CEOs who are second- or third-generation immigrants are associated with a 6.2% higher profitability compared with the average firm. This effect weakens over successive immigrant generations and cannot be detected for top executives apart from the CEO. Additional analysis attributes this effect to various cultural values that prevail in a CEO’s ancestral country of origin.

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