Managerial overconfidence, CSR and firm value

Gao, Yu; Han, Kil-Seok

doi:10.1080/16081625.2020.1830558

Cited by 24 publications

(25 citation statements)

References 42 publications

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“…Focus on ESG motivates a company to oper-ate more openly, making sustainability reports, including sections in their annual reports on social, environmental and other initiatives for the good of society, and improvement of corporate culture. According to analytical reviews of the Russian Union of Industrialists and Entrepreneurs for 2003 6 and 2018 7 , the number of companies making non-financial reports grew from 5 to 176. However, dependence of efficiency of ESG practices implementation on CEO's personal and behavioral characteristics still lack empirical evidence with Russian and world data.…”

Section: Polls Of Investors and Dynamics Of Esg Development Inmentioning

confidence: 99%

“…From the perspective of the competitive strategy theory, sustainable development activity may yield a competitive advantage to a company [6]. ESG practices may enhance the company image and raise brand recognition by improving corporate identity [7].…”

Section: Esg Approach To Corporate Governancementioning

confidence: 99%

“…The CEO plays a significant part in such a strategic choice. He/she influences financing and investment decisions of the company [6]. It is assumed that corporate strategy depends heavily on the CEO's views, his/her experience, and personal qualities.…”

Section: Esg Approach To Corporate Governancementioning

confidence: 99%

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Do CEO Behavior Biases and Personal Traits Influence ESG Performance? The Evidence from Emerging Capital Market of Russia

Lazareva¹

2022

КФ

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The impact of behavioral biases and personal traits of the CEO on corporate decisions and performance has become the important agenda for management, governance and finance research. But still the empirical evidence on the influence of behavioral biases on the implementation of sustainability principles into company’s strategies is missing not only inemerging markets, but for developed markets as well. We aim to fulfill this gap by findings on the role of behavioral characteristics of a CEO and how they affect the effectiveness of the ESG (Environmental, Social and Corporate Governance) approach to company management in one of the largest emerging capital market of Russia. We first focus on CEO’s optimism,narcissism, self-confidence, and the lack of confidence of the CEO and their impact over ESG performance. To identify behavioral biases, we use textual analysis and the “bag of words” method applied to the written letters to the shareholders by CEOs of Russian companies in 2017–2019 on a sample of 38 companies with official external ESG ratings. Our results confirm a significant influence of optimism and narcissism on the effectiveness of the ESG approach, but self-confidence does not appear to be statistically significant. Moreover, our findings prove significance of some personal traits such as industry experience and technical educational background. Our findings validate and complement prior research on personal characteristics of CEOs and provide novel data on the impact on ESG in emerging capital markets.

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Section: Polls Of Investors and Dynamics Of Esg Development Inmentioning

confidence: 99%

Section: Esg Approach To Corporate Governancementioning

confidence: 99%

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Do CEO Behavior Biases and Personal Traits Influence ESG Performance? The Evidence from Emerging Capital Market of Russia

Lazareva¹

2022

КФ

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“…In the third step, we added mediating variables (financing constraints) as independent variables on the basis of the first step, and used Model 5 to test the impact of mediating variables (financing constraints) on dependent variables (eco-innovation). Wen and Ye [54] and Gao and Han [55] summarise the above logic through Figure 2. As shown in Figure 2, if the coefficients c and a are significant, and the coefficient b of financing constraints in the third step is also significant, then there is a mediating effect.…”

Section: Mediation Mechanism Testmentioning

confidence: 99%

The government-business relationship and eco-innovation: evidence from chinese automobile industry

Gao

Teng

Cai

et al. 2021

Ecological Chemistry and Engineering S

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This study used 2017-2019 Chinese A-share-listed automobile manufacturing companies as research samples to analyse the impact of the government-business relationship on eco-innovation. We found that a healthy government-business relationship had a positive impact on enterprise eco-innovation. The mediating effects test verified that a healthy government-business relationship affected enterprise eco-innovation through financing constraints. In addition, managerial ownership significantly increased the positive impact of a healthy government-business relationship on enterprise eco-innovation. We also found that a healthy government-business relationship had a more substantial impact on enterprise eco-innovation in non-state-owned enterprises when considering corporate property rights. The study results provide empirical evidence for the influence of the government-business relationship on enterprise eco-innovation and deepen our understanding of eco-innovation in China’s automobile manufacturing industry.

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“…Through ESG practice, corporates involve environmental, social, and governance factors into their management and operation processes. By improving ESGP, companies can effectively alleviate information asymmetry (Siew et al, 2016;Cui and Liu, 2018), build their reputation (Jeffrey et al, 2019), gain support from stakeholders (Weber, 2014;Huang, 2021), and promote corporate performance (Friede et al, 2015;Gao and Han, 2020). However, scholars who take the opposite view on corporate ESG construction argue that corporate investment in ESG activities may not make profits in the short term but instead restrict the flexibility of the corporate operating capital (Skarmeas and Leonidou, 2013), then expanding the exposure to financial risks, and ultimately damages the interests of shareholders (Kim and Lyon, 2015).…”

Section: Introductionmentioning

confidence: 99%

Does ESG always improve corporate performance? Evidence from firm life cycle perspective

Gao

Meng

Wang

et al. 2023

Front. Environ. Sci.

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In this study, drawing on firm life cycle theory, we focus on the corporate performance of Environmental, Social, and Governance (ESG) engagement via financial stress and consider the moderate effect of transparency, financial slack, and environmental uncertainty. The industry-year fixed effects panel regression analysis is executed based on the data including 11,742 firm-year observations for 1,486 Chinese A-share listed companies from 2010 to 2020. The results show that ESG performance can significantly improve corporate performance at all life cycle stages, especially when the corporate is in the growth stage. Moreover, the mechanism analysis shows that the financial risk mediates the relation between ESG performance and corporate performance for the corporates in the growth and maturity stages. The association between ESG and corporate performance is more pronounced when corporate information disclosure quality is high. Moreover, financial slack moderates and undermine the association between ESG and corporate performance in the maturity stages. Similarly, for the maturity and decline stages of corporate, environmental uncertainty moderates and undermines the association between ESG and corporate performance. Besides offering scientific evidence for the role of ESG ratings in relieving financial pressure and promoting corporate performance in growth and maturity stages, the results can also inform the regulators and/or investors of the benefit of engaging in corporates sustainability transition, which has implications for both the success of the regulatory regime and the advancement of long-term investment philosophy.

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Managerial overconfidence, CSR and firm value

Cited by 24 publications

References 42 publications

Do CEO Behavior Biases and Personal Traits Influence ESG Performance? The Evidence from Emerging Capital Market of Russia

Do CEO Behavior Biases and Personal Traits Influence ESG Performance? The Evidence from Emerging Capital Market of Russia

The government-business relationship and eco-innovation: evidence from chinese automobile industry

Does ESG always improve corporate performance? Evidence from firm life cycle perspective

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