Research Summary We consider the link between firms' decisions to adopt a CSR executive position and the political ideology of prior adopter CEOs. We theorize that firms are more likely to adopt a CSR executive position when it has been previously adopted by conservative‐leaning CEOs at other firms, as opposed to liberal‐leaning CEOs. This effect is due, we argue, to the increased perceptual salience and situational attributions associated with ideologically incongruent actions (i.e., actions that appear inconsistent with known political values). We further posit that these effects are stronger when the observing firms experience increased salience of CSR issues due to shareholder pressure and institutional equivalence between the referent and the observing firms. We find support for these ideas in a longitudinal sample of Fortune 500 companies. Managerial Summary How do CEOs' values affect industry‐wide appointments of senior executives in charge of Corporate Social Responsibility (CSR)? Prior research suggests that liberal political beliefs of CEOs predict their CSR commitments. Our study explores how the political beliefs of CEOs—in this case, CEOs who have created a new CSR executive position in their companies—influence the likelihood that peer CEOs will imitate their decisions. Specifically, we find that when conservative CEOs adopt a CSR executive position, other companies are more likely to follow than when liberal‐leaning CEOs do so. These effects are even stronger when companies are experiencing CSR‐related pressure from shareholders and when they belong to the same industry and community as the firms of the CEOs they are observing.

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This article analyses the impact of an entrepreneur’s financial literacy upon innovation within small- and medium-sized enterprises (SMEs) and, in so doing, extends human capital theory to consider the effect of financial literacy on risky investment decisions. Using a large survey dataset of Chinese SMEs in 2015 and 2017, our findings suggest that financial literacy is positively associated with innovation; positive relationships are robust to different innovation metrics. In addition, we find that gender matters, as male owners appear to promote more innovations, while firm size is positively associated with innovation. Additional analysis suggests that risk tolerance is a transmission mechanism for the impact of financial literacy on innovation. Our results corroborate previous studies showing that individuals with greater financial literacy make sound personal financial decisions and so have important public policy implications.

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