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

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  • Chen, Jing
  • Huang, Xiaoqi
  • Liu, Xinghe
  • Xiong, Hao
  • Xu, Cheng

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.

Suggested Citation

  • Chen, Jing & Huang, Xiaoqi & Liu, Xinghe & Xiong, Hao & Xu, Cheng, 2023. "Self-discipline or self-interest: CEOs’ hometown identity and excess perks," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322007309
    DOI: 10.1016/j.frl.2022.103554
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    References listed on IDEAS

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    Cited by:

    1. Chen, Jing & Hu, Peiwen & Liu, Shan & Liu, Xinghe, 2024. "Too scared to make mistakes at home: CEO hometown identity and corporate risk-taking," Research in International Business and Finance, Elsevier, vol. 70(PB).
    2. Zhao, Wenzhuo & Qin, Luohan & Zhao, Yali & Zuo, Jingjing, 2024. "Social media coverage and perk consumption: Agency view or efficiency view?," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1058-1073.
    3. Yang, Ziying & Wang, Bo & Huang, Li, 2024. "Eat, drink, entertain, travel? The impact of air pollution on excess perks — natural experiment evidence from COVID-19," Finance Research Letters, Elsevier, vol. 62(PA).
    4. Liu, Xinghe & Zhong, Weifeng & Chen, Jing, 2023. "Stay home, stay safe: CEO hometown identity and default risk," Finance Research Letters, Elsevier, vol. 57(C).
    5. Chen, Jing & Hong, Junjie & Zhong, Weifeng & Wang, Chengqi & Liu, Xinghe, 2024. "Doing right at home: Do hometown CEOs curb corporate misconduct?11Chengqi Wang acknowledges the financial support of National Natural Science Foundation of China (No. 72332005). Xinghe Liu acknowledge," Technological Forecasting and Social Change, Elsevier, vol. 205(C).

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