Self-discipline or self-interest: CEOs’ hometown identity and excess perks

Jing Chen; Xiaoqi Huang; Xinghe Liu; Hao Xiong; Cheng Xu

doi:10.1016/j.frl.2022.103554

Self-discipline or self-interest: CEOs’ hometown identity and excess perks

Jing Chen, Xiaoqi Huang, Xinghe Liu^*, Hao Xiong, Cheng Xu

^*Corresponding author for this work

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

Our study examines whether CEOs’ hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs’ hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.

Original language	English
Article number	103554
Journal	Finance Research Letters
Volume	52
DOIs	https://doi.org/10.1016/j.frl.2022.103554
Publication status	Published - Mar 2023

Keywords

Excess perks
External governance mechanisms
Hometown identity
Internal governance mechanisms

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10.1016/j.frl.2022.103554

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title = "Self-discipline or self-interest: CEOs{\textquoteright} hometown identity and excess perks",

abstract = "Our study examines whether CEOs{\textquoteright} hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs{\textquoteright} hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs{\textquoteright} hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.",

keywords = "Excess perks, External governance mechanisms, Hometown identity, Internal governance mechanisms",

author = "Jing Chen and Xiaoqi Huang and Xinghe Liu and Hao Xiong and Cheng Xu",

note = "Funding Information: We acknowledge financial support from the National Natural Science Foundation of China (Grant number 71972057 ; 72072045 ), National Planning Office of Philosophy and Social Sciences, the National Social Science Fund of China ( 19CGL012 ) and Key Natural Science Foundation of Guangdong Province, China (Grant number 017X030311026 ). We remain responsible for all errors and omissions. Publisher Copyright: {\textcopyright} 2022 Elsevier Inc.",

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doi = "10.1016/j.frl.2022.103554",

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AU - Chen, Jing

AU - Huang, Xiaoqi

AU - Liu, Xinghe

AU - Xiong, Hao

AU - Xu, Cheng

N1 - Funding Information: We acknowledge financial support from the National Natural Science Foundation of China (Grant number 71972057 ; 72072045 ), National Planning Office of Philosophy and Social Sciences, the National Social Science Fund of China ( 19CGL012 ) and Key Natural Science Foundation of Guangdong Province, China (Grant number 017X030311026 ). We remain responsible for all errors and omissions. Publisher Copyright: © 2022 Elsevier Inc.

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N2 - Our study examines whether CEOs’ hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs’ hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.

AB - Our study examines whether CEOs’ hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs’ hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.

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Self-discipline or self-interest: CEOs’ hometown identity and excess perks

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Keywords

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