Theses and Dissertations

Date of Award

7-1-2024

Document Type

Dissertation

Degree Name

Doctor of Philosophy (PhD)

Department

Finance

First Advisor

Ahmed Elnahas

Second Advisor

Siamak Javadi

Third Advisor

Nam H. Nguyen

Abstract

This dissertation consists of two essays that investigate the effect of CEOs’ cultural heritage on corporate decision-making. In the first essay, I examine the impact of CEOs’ cultural heritage on corporate social responsibility (CSR). I present empirical evidence that CEOs originating from countries with high power distance, more uncertainty avoidance and long-term orientation have high CSR scores, while those from individualistic and indulgent cultures have low CSR scores. This effect lasts up to three generations before it disappears due to acculturation. These results are robust to using propensity score matching, entropy balancing, and Oster’s test to address endogeneity and selection bias. Factor and machine learning (K-means clustering) analyses provide additional insights into the countries of origin of high and low CSR performers. In the second essay, I investigate the effect of CEOs’ creative cultural heritage that emphasizes intellectual autonomy and individualism on corporate scientific research and innovation outputs. I find evidence that firms led by CEOs originating from countries with high intellectual autonomy and more individualistic cultures produce more corporate scientific research, proxied by scientific publications, as well as innovation, proxied by the number of granted patents. I also present evidence that these firms use scientific publications as an upstream knowledge of innovation, indicated by patent citations. This effect persists for up to three generations and disappears in the fourth due to cultural assimilation. My results are robust to addressing selection bias using a founder CEO subsample, Heckman two-stage analysis, propensity score matching, and entropy balancing. The results are also robust in addressing endogeneity using CEO turnover as an exogenous shock in a DID framework, and pronoun drop as an instrumental variable in a 2SLS regression model.

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Copyright 2024 Md. Showaib Rahman Sarker. https://proquest.com/docview/3100330612

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