Essays on corporate finance: how executive traits and incentives shape corporate and career outcomes

Ruan, J. (2025) Essays on corporate finance: how executive traits and incentives shape corporate and career outcomes. PhD thesis, University of Reading. doi: 10.48683/1926.00122847

Abstract/Summary

This thesis consists of three essays on empirical corporate finance. The first and last chapters provide the introduction and conclusion, respectively. The first essay (Chapter 2) examines the impact of CEO inherited altruism on firm corporate social responsibility (CSR) performance and shareholder returns. The results show that firms led by CEOs with stronger altruistic preferences exhibit better CSR performance, particularly during normal ‘good’ economic times and when firms have more resources available. CEO inherited altruistic preferences do not have any negative impact on firms’ stock returns in general, while they protect shareholder returns during times of financial crisis and recessions, particularly for firms with limited financial flexibility and fewer available resources. The second essay (Chapter 3) explores the influence of CSR contracting on green innovation in U.S. firms. We find that CSR contracting significantly enhances both the volume and value of green patents. Additionally, CSR contracting fosters patents with broader technological roots, but it does not necessarily lead to a wider range of forward citations. Additionally, CSR contracting encourages both exploitative and exploratory innovations and is linked to improved environmental performance. However, we cannot conclusively assert that green innovation mediates the relationship between CSR contracting and environmental performance. The third essay (Chapter 4) shows show that the probability of a forced CEO turnover in U.S. firms is higher when the CEO has ancestral origin in a country with higher political animosity with the US, even after controlling for several firm-, performance-, and CEO-related characteristics. The relationship is unlikely linked just to CEO performance or worse bilateral trade relations. Our findings point instead to a behavioral bias in CEO dismissals: the effect of political animosity is stronger when the CEO’s ancestral country is viewed less favorably by the U.S. public, in states with less ethnic diversity, and in firms under lower institutional investors’ monitoring.

Item Type	Thesis (PhD)
URI	https://centaur.reading.ac.uk/id/eprint/122847
Identification Number/DOI	10.48683/1926.00122847
Divisions	Henley Business School
Date on Title Page	September 2024
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