CEO’s Childhood Experience of Natural Disaster and CSR Activities

Abstract

Interest in the drivers of firms’ corporate social responsibility (CSR) is growing. However, little is known about the influence of a CEO’s childhood experience of natural disasters on CSR. Using archival data, we explore this relationship by offering three mechanisms that may account for how the CEO’s childhood experience of natural disaster is related to their CSR. More specifically, while prior research has established a positive relationship based on the post-traumatic growth theory, we show that the dual mechanisms of prosocial values and a CEO’s risk aversion explain the positive relationship. We further find that the positive relationship is stronger (1) when CEOs have longer career horizons and (2) when community social capital is high. This study contributes to both research and managerial implications on the topics of CEO’s childhood experience and CSR. In particular, this study advances the upper echelon theory by revealing that a CEO’s childhood experience of natural disaster is a useful yet relatively underexplored variable that can help explain the substantial variations in firms’ CSR. Moreover, we emphasize that a CEO’s career horizons and level of community social capital are important variables that further amplify the effect of a CEO’s childhood experience of natural disaster on the firm’s CSR commitment.

The Chairman’s Rural Origin and Short-Term Expenditures in China

“…Previous research has also focused on the impact of managers' upbringing on corporate decisions. For example, harsh early-life natural conditions and economic poverty can evoke managers' empathy [19,23]. The underlying logic aligns with this study, emphasizing the continuous influence of cognitive and value patterns shaped by early natural and social environments on individuals' decision-making processes.…”

“…Previous research has underscored the significance of a manager's upbringing on corporate decision making [19,23]. These studies, akin to ours, emphasize the enduring influence of early-life experiences on the decision-making process.…”

“…Observable demographic characteristics have been found to reflect managers' value systems and management styles [21], and recent research has started to explore the origins of executives' value systems [18,22]. Recent studies have shown that the birth environment of decision makers significantly influences organizational decision making [13,23]. This influence stems from the persistent impact of imprints from early childhood on individuals' decision-making behavior.…”

Sentimentally attached to hometown: CEO hometown identity and corporate environmental violations

“…In addition, the deeper characteristics of CEOs, such as their arrogance (Tang et al, 2018), narcissism (Al-Shammari et al, 2019), emotion (Wang et al, 2022), values (Prompeler et. al., 2023, childhood experience (Choi et al, 2023), entrepreneurial spirit , and moral leadership (Tu and Lu, 2016), have also gradually attracted the attention of scholars and have been confirmed to have direct or indirect impacts on CSR. Upper echelons theory has therefore been deepened and expanded via continuous research.…”