Date of Award
Doctor of Philosophy (PhD)
Dr. Michael A. Abebe
Dr. Wanrong Hou
Dr. Pingshu Li
There is a longstanding societal expectation that business leaders refrain from involving in social and political issues and primarily focus on managing their firms. In recent years, however, there is a growing trend of CEOs taking a stance on controversial sociopolitical issues that are not directly related to their company’s core business. This dissertation consists of three essays focusing on this phenomenon of CEO activism.
In my first essay, given that CEO activism represents a nascent phenomenon, I explore the conceptualization of CEO activism. Additionally, I propose three main motives behind CEO activism: intrinsic, instrumental, and stakeholder-focused. In my second essay, I shift my focus from the antecedents to the consequences of CEO activism. In particular, this essay examines whether CEO activism enhances firm performance and how investors may react to incidents of CEO activism. Having addressed the antecedents and consequences of CEO activism in the first two essays, the third essay focuses on the relationship between CEO activism and non-market strategies. Specifically, I examine the impact of CEO activism on corporate social responsibility (CSR) and corporate political activity (CPA).
I empirically test my predictions using data drawn from U.S.-based publicly traded S&P 500 between 2008–2017. The findings provide mixed support for my predictions. The first essay shows that several organizational (firm reputation and firm political engagement), managerial (CEO celebrity status and CEO power), and industry level (intensity of consumer activism) variables are positively related to CEO activism. Consistent with agency theory predictions, empirical findings of the second essay indicate that CEO activism engenders a significant negative stock market reaction. The findings suggest that investors and consumers are two prominent stakeholders with conflicting reactions to incidents of CEO activism. Consumers support the stance taken by conservative leaning activist-CEOs rather than liberal leaning activist-CEOs as reflected in the firm’s quarterly sales growth. Finally, the third essay demonstrates that liberal leaning CEO activism, compared to conservative leaning CEO activism, is positively related to CSR. Overall, the findings of this dissertation contribute to the on-going research on corporate governance.
Acharya, Keshab, "Three Essays on CEO Activism, Strategic Choices and Firm Performance" (2020). Theses and Dissertations. 602.