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To win the marketplace, you must first win the workplace: CEO ability, CSR, and firm performance: evidence from fast-growing firms in Asia–Pacific

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Abstract

In this study, we examine the impacts of the chief executive officer’s (CEO) ability on a firm’s corporate social responsibility (CSR) and the CSR effect on a firm’s performance. In addition, we explore the CEO’s role in aligning the relationship between CSR and firm performance. Our findings show that a firm’s CSR and performance increase with the CEO’s ability. Further, CEO ability moderates an insignificant association between CSR and firm performance. Importantly, we also find that the positive relation between CEO ability and CSR is weak for CEOs with dual roles and is also ineffective when CSR emphasis exerted by the external environment is more robust. Importantly, we find that gender critical mass substitutes the relation between CEO ability and CSR, signifying that a firm with gender crucial mass on its board is likelier to adopt CSR irrespective of CEO ability. We also find that CEO career concerns moderate the relation between CEO ability and firm performance. Notably, CEO gender moderates the association between CEO ability and firm CSR and firm performance, implying that female CEOs with high ability are likelier to adopt CSR practices and align CSR performance to firm performance. Overall, our evidence is consistent with our conjectures that more able CEOs have fewer career concerns and are more willing to undertake CSR investments leading to firm performance.

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Notes

  1. The HHI is a commonly accepted measure of market concentration. It is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers. It can range from close to 0–10,000.

  2. For brevity, we do not include correlation matrix. We test correlation between CEO ability measure, CSR determinants and ROA measure. To address the concern, we presented Variance Inflation Factor.

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  1. School of Management, Canadian University of Dubai, Dubai, UAE

    Saif Ur-Rehman & Elgilani Elshareif

  2. School of Business, Skyline University College, Sharjah, UAE

    Naseem Abidi

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  1. Saif Ur-Rehman
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Appendix A

Appendix A

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Table 11 Determinants of CEO ability (Tobit regression)
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Ur-Rehman, S., Elshareif, E. & Abidi, N. To win the marketplace, you must first win the workplace: CEO ability, CSR, and firm performance: evidence from fast-growing firms in Asia–Pacific. Int J Discl Gov (2024). https://doi.org/10.1057/s41310-023-00222-3

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