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Executives’ preference for integrity and product quality: Evidence from the Chinese food industry

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  • Zhang, Zhihong
  • Wang, Pin
  • Xu, Huichao

Abstract

This study tests whether and how top executives’ preference for integrity affects product quality, using manually collected data for executive birthplace and media coverage related to food quality. We find, using ordered logistic regressions and ordinary least squares based on propensity score matching, that a preference for integrity among food industry executives has a positive effect on food quality. Further, executive power significantly regulates this effect. Valuing integrity helps top executives to overcome the temptation to misuse power. Thus, a concentration of power among executives in the Chinese food companies plays a positive role in propagating integrity within the firms they lead, further strengthening the inhibitory effect on quality failure and the positive effect on quality and safety. Finally, we find that internal control is a channel through which the top executives’ preference for integrity can positively influence product quality.

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  • Zhang, Zhihong & Wang, Pin & Xu, Huichao, 2020. "Executives’ preference for integrity and product quality: Evidence from the Chinese food industry," Economic Modelling, Elsevier, vol. 90(C), pages 374-385.
    • Handle: RePEc:eee:ecmode:v:90:y:2020:i:c:p:374-385
    DOI: 10.1016/j.econmod.2019.11.026
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