IDEAS home Printed from https://ideas.repec.org/a/bla/bstrat/v33y2024i4p3331-3355.html
   My bibliography  Save this article

CEO foreign experience and corporate environmental, social, and governance (ESG) performance

Author

Listed:
  • Yang Liu
  • Fukang Zhang
  • Han Zhang

Abstract

This research examines the impact of the Chinese CEOs with foreign experience from developed nations on the firm's environmental, social, and governance (ESG) performance, drawing on imprinting theory, stakeholder theory, and resource dependence theory. Using manually collected data of CEOs' foreign experience and corporate ESG data from the Bloomberg database for Chinese listed firms from 2011 to 2020, we observe that CEOs with foreign imprinting tend to improve their corporate ESG performance in China. The positive relationship between CEO foreign experience and corporate ESG performance is more significant when the CEO is female, when the CEO is more educated, and when the firm is state‐owned. To better understand the underlying influence, our study indicates that the influence of CEOs' foreign experiences on corporate ESG performance is primarily manifested in the advancement of corporate social and environmental responsibility. Section 4.3 reveals that experiences obtained from developed economies have a more pronounced impact on promoting firms' ESG performance compared to experiences gained in underdeveloped countries. This empirical evidence underscores the significance of foreign experiences gained in developed economies in driving firms' ESG performance. Overall, our research makes a contribution to the study of CEOs' foreign exposure and corporate ESG performance.

Suggested Citation

  • Yang Liu & Fukang Zhang & Han Zhang, 2024. "CEO foreign experience and corporate environmental, social, and governance (ESG) performance," Business Strategy and the Environment, Wiley Blackwell, vol. 33(4), pages 3331-3355, May.
    • Handle: RePEc:bla:bstrat:v:33:y:2024:i:4:p:3331-3355
    DOI: 10.1002/bse.3647
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/bse.3647
    Download Restriction: no
    File URL: https://libkey.io/10.1002/bse.3647?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Feng, Jingwen & Goodell, John W. & Shen, Dehua, 2022. "ESG rating and stock price crash risk: Evidence from China," Finance Research Letters, Elsevier, vol. 46(PB).
    2. Gillan, Stuart L. & Koch, Andrew & Starks, Laura T., 2021. "Firms and social responsibility: A review of ESG and CSR research in corporate finance," Journal of Corporate Finance, Elsevier, vol. 66(C).
    3. Conyon, Martin J. & Haß, Lars Helge & Vergauwe, Skrålan & Zhang, Zhifang, 2019. "Foreign experience and CEO compensation," Journal of Corporate Finance, Elsevier, vol. 57(C), pages 102-121.
    4. Musteen, Martina & Francis, John & Datta, Deepak K., 2010. "The influence of international networks on internationalization speed and performance: A study of Czech SMEs," Journal of World Business, Elsevier, vol. 45(3), pages 197-205, July.
    5. Husted, Bryan W. & Sousa-Filho, José Milton de, 2019. "Board structure and environmental, social, and governance disclosure in Latin America," Journal of Business Research, Elsevier, vol. 102(C), pages 220-227.
    6. Paula L. Rechner & Dan R. Dalton, 1991. "CEO duality and organizational performance: A longitudinal analysis," Strategic Management Journal, Wiley Blackwell, vol. 12(2), pages 155-160, February.
    7. Liu, Chelsea, 2018. "Are women greener? Corporate gender diversity and environmental violations," Journal of Corporate Finance, Elsevier, vol. 52(C), pages 118-142.
    8. Masulis, Ronald W. & Wang, Cong & Xie, Fei, 2012. "Globalizing the boardroom—The effects of foreign directors on corporate governance and firm performance," Journal of Accounting and Economics, Elsevier, vol. 53(3), pages 527-554.
    9. Dadanlar, Hazel H. & Abebe, Michael A., 2020. "Female CEO leadership and the likelihood of corporate diversity misconduct: Evidence from S&P 500 firms," Journal of Business Research, Elsevier, vol. 118(C), pages 398-405.
    10. Brian K. Boyd, 1995. "CEO duality and firm performance: A contingency model," Strategic Management Journal, Wiley Blackwell, vol. 16(4), pages 301-312.
    11. Pugliese, Amedeo & Minichilli, Alessandro & Zattoni, Alessandro, 2014. "Integrating agency and resource dependence theory: Firm profitability, industry regulation, and board task performance," Journal of Business Research, Elsevier, vol. 67(6), pages 1189-1200.
    12. Son Le & Mark Kroll, 2017. "CEO international experience: Effects on strategic change and firm performance," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 48(5), pages 573-595, July.
    13. Duan, Tinghua & Hou, Wenxuan & Rees, William, 2020. "CEO international experience and foreign IPOs," Economic Modelling, Elsevier, vol. 87(C), pages 461-470.
    14. Sergiy D. Dmytriyev & R. Edward Freeman & Jacob Hörisch, 2021. "The Relationship between Stakeholder Theory and Corporate Social Responsibility: Differences, Similarities, and Implications for Social Issues in Management," Journal of Management Studies, Wiley Blackwell, vol. 58(6), pages 1441-1470, September.
    15. Nathan Nunn & Nancy Qian, 2014. "US Food Aid and Civil Conflict," American Economic Review, American Economic Association, vol. 104(6), pages 1630-1666, June.
    16. Guangyou Zhou & Lian Liu & Sumei Luo, 2022. "Sustainable development, ESG performance and company market value: Mediating effect of financial performance," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3371-3387, November.
    17. Tao Zhang & Lishi Gu & Jenny Jing Wang, 2023. "State‐owned capital and corporate social responsibility of private‐holding companies: evidence from China," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(S1), pages 1101-1120, April.
    18. Hollis Ashbaugh & Morton Pincus, 2001. "Domestic Accounting Standards, International Accounting Standards, and the Predictability of Earnings," Journal of Accounting Research, Wiley Blackwell, vol. 39(3), pages 417-434, December.
    19. Liu, Yang & Ouyang, Zhe & He, Mujia, 2022. "Why and when firms respond accommodatively to the product-harm crisis: An institutional perspective," Journal of Retailing and Consumer Services, Elsevier, vol. 68(C).
    20. Krishna Udayasankar, 2008. "Corporate Social Responsibility and Firm Size," Journal of Business Ethics, Springer, vol. 83(2), pages 167-175, December.
    21. Wen Chen & Yufeng Zhu & Chenyu Wang, 2023. "Executives' overseas background and corporate green innovation," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 165-179, January.
    22. Zyglidopoulos, Stelios C. & Georgiadis, Andreas P. & Carroll, Craig E. & Siegel, Donald S., 2012. "Does media attention drive corporate social responsibility?," Journal of Business Research, Elsevier, vol. 65(11), pages 1622-1627.
    23. Shuying Li & Yujie Liu & Yang Xu, 2022. "Does ESG Performance Improve the Quantity and Quality of Innovation? The Mediating Role of Internal Control Effectiveness and Analyst Coverage," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    24. Daniel Slater & Heather Dixon-Fowler, 2009. "CEO International Assignment Experience and Corporate Social Performance," Journal of Business Ethics, Springer, vol. 89(3), pages 473-489, October.
    25. Zhe Ouyang & Ruixue Lv & Yang Liu, 2023. "Can corporate social responsibility protect firm value during corporate environmental violation events?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1942-1952, July.
    26. Amore, Mario Daniele & Bennedsen, Morten & Larsen, Birthe & Rosenbaum, Philip, 2019. "CEO education and corporate environmental footprint," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 254-273.
    27. Elizabeth Stanny & Kirsten Ely, 2008. "Corporate environmental disclosures about the effects of climate change," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 15(6), pages 338-348, November.
    28. Xiaofeng Quan & Yun Ke & Yuting Qian & Yao Zhang, 2023. "CEO Foreign Experience and Green Innovation: Evidence from China," Journal of Business Ethics, Springer, vol. 182(2), pages 535-557, January.
    29. Gennaro Bernile & Vineet Bhagwat & P. Raghavendra Rau, 2017. "What Doesn't Kill You Will Only Make You More Risk-Loving: Early-Life Disasters and CEO Behavior," Journal of Finance, American Finance Association, vol. 72(1), pages 167-206, February.
    30. Sara De Masi & Agnieszka Słomka‐Gołębiowska & Claudio Becagli & Andrea Paci, 2021. "Toward sustainable corporate behavior: The effect of the critical mass of female directors on environmental, social, and governance disclosure," Business Strategy and the Environment, Wiley Blackwell, vol. 30(4), pages 1865-1878, May.
    31. Amy J. Hillman & Gerald D. Keim, 2001. "Shareholder value, stakeholder management, and social issues: what's the bottom line?," Strategic Management Journal, Wiley Blackwell, vol. 22(2), pages 125-139, February.
    32. Najah Attig & Narjess Boubakri & Sadok El Ghoul & Omrane Guedhami, 2016. "Firm Internationalization and Corporate Social Responsibility," Journal of Business Ethics, Springer, vol. 134(2), pages 171-197, March.
    33. Jian Zhang & Dongmin Kong & Ji Wu, 2018. "Doing Good Business by Hiring Directors with Foreign Experience," Journal of Business Ethics, Springer, vol. 153(3), pages 859-876, December.
    34. Samuel Drempetic & Christian Klein & Bernhard Zwergel, 2020. "The Influence of Firm Size on the ESG Score: Corporate Sustainability Ratings Under Review," Journal of Business Ethics, Springer, vol. 167(2), pages 333-360, November.
    35. Magnusson, Peter & Boggs, David J., 2006. "International experience and CEO selection: An empirical study," Journal of International Management, Elsevier, vol. 12(1), pages 107-125, March.
    36. Catherine M. Daily & S. Trevis Certo & Dan R. Dalton, 2000. "International experience in the executive suite: the path to prosperity?," Strategic Management Journal, Wiley Blackwell, vol. 21(4), pages 515-523, April.
    37. Feng Cao & Jian Sun & Rongli Yuan, 2019. "Board directors with foreign experience and stock price crash risk: Evidence from China," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 46(9-10), pages 1144-1170, October.
    38. Kim, Y. Han (Andy) & Park, Junho & Shin, Hojong, 2022. "CEO facial masculinity, fraud, and ESG: Evidence from South Korea," Emerging Markets Review, Elsevier, vol. 53(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ilya R. P. Cuypers & Charmi Patel & Gokhan Ertug & Jiatao Li & Youtha Cuypers, 2022. "Top management teams in international business research: A review and suggestions for future research," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 481-515, April.
    2. Wunhong Su & Xingxing Hu & Liuzhen Zhang, 2023. "Association Between Directors With Foreign Experience and Firms’ Environmental Disclosure," SAGE Open, , vol. 13(4), pages 21582440231, December.
    3. Yang Liu & Han Zhang & Fukang Zhang, 2024. "The power of CEO growing up in poverty: Enabling better corporate environmental, social, and governance (ESG) performance," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 31(3), pages 1610-1633, May.
    4. Stefan Schmid & Sebastian Baldermann, 2021. "CEOs’ International Work Experience and Compensation," Management International Review, Springer, vol. 61(3), pages 313-364, June.
    5. Wan, Yang & Hong, Ziyi & Liu, Wenqing & Cui, Jiashuo, 2023. "Executives’ education: A catalyst for enhanced ESG disclosure," Finance Research Letters, Elsevier, vol. 58(PB).
    6. Ren, Xiaohang & Zeng, Gudian & Zhao, Yang, 2023. "Digital finance and corporate ESG performance: Empirical evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    7. Tutun Mukherjee & Som Sankar Sen, 2022. "Impact of CEO attributes on corporate reputation, financial performance, and corporate sustainable growth: evidence from India," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-50, December.
    8. Xueman Xiang & Carl R. Chen & Yue Liu & Azhar Mughal & Qizhi Tao, 2024. "Are directors with foreign experience better monitors? Evidence from investment efficiency," Review of Quantitative Finance and Accounting, Springer, vol. 62(2), pages 799-840, February.
    9. Runan Shen, 2024. "A Study of the Impact of ESG on Total Factor Productivity in a Dual-Carbon Context—Based on the Moderating Role of CEOs’ Overseas Experience," Sustainability, MDPI, vol. 16(13), pages 1-15, July.
    10. Cunyi Yang & Conghao Zhu & Khaldoon Albitar, 2024. "ESG ratings and green innovation: A U‐shaped journey towards sustainable development," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4108-4129, July.
    11. Caterina Lucarelli & Sabrina Severini, 2024. "Anatomy of the chimera: Environmental, Social, and Governance ratings beyond the myth," Business Strategy and the Environment, Wiley Blackwell, vol. 33(5), pages 4198-4217, July.
    12. Liu, Xiaoqian & Cifuentes-Faura, Javier & Zhao, Shikuan & Wang, Long, 2024. "The impact of government environmental attention on firms’ ESG performance: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    13. Lihua Liu & Dongmin Kong & Wei Yang, 2022. "Brain gain of analysts in China: foreign experiences and forecast accuracy," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(2), pages 2089-2129, June.
    14. Heying Liu & Chan Lyu, 2022. "Can ESG Ratings Stimulate Corporate Green Innovation? Evidence from China," Sustainability, MDPI, vol. 14(19), pages 1-20, September.
    15. D'Souza, Reagan & Ho, Choy Yeing (Chloe) & Yang, Joey W., 2024. "The cost of corporate social irresponsibility for acquirers," Journal of Banking & Finance, Elsevier, vol. 162(C).
    16. Liu, Xianda & An, Jiafu & Duan, Tinghua & Hou, Wenxuan & Zhao, Ruoran, 2023. "Lawyers in the boardroom and firms’ environmental performance," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 89(C).
    17. Anup Banerjee & Mattias Nordqvist & Karin Hellerstedt, 2020. "The role of the board chair—A literature review and suggestions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 372-405, November.
    18. Dorota Dobija & Claudia Arena & Łukasz Kozłowski & Joanna Krasodomska & Justyna Godawska, 2023. "Towards sustainable development: The role of directors' international orientation and their diversity for non‐financial disclosure," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(1), pages 66-90, January.
    19. Chowdhury, Rajib & Doukas, John A. & Park, Jong Chool, 2021. "Stakeholder orientation and the value of cash holdings: Evidence from a natural experiment," Journal of Corporate Finance, Elsevier, vol. 69(C).
    20. Haoyuan Ding & Bo Pu & Tong Qi & Kai Wang, 2022. "Valuation effects of the US–China trade war: The effects of foreign managers and foreign exposure," Journal of Economic Surveys, Wiley Blackwell, vol. 36(3), pages 662-683, July.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:bstrat:v:33:y:2024:i:4:p:3331-3355. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1002/(ISSN)1099-0836 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.