Self-discipline or self-interest: CEOs’ hometown identity and excess perks

Jing Chen, Xiaoqi Huang, Xinghe Liu, Hao Xiong and Cheng Xu

Finance Research Letters, 2023, vol. 52, issue C

Abstract: Our study examines whether CEOs’ hometown identity curbs or facilitates a specific type of agency cost. The results based on a sample of listed Chinese firms from 2008 to 2020 show that CEOs’ hometown identity significantly lowers the consumption of excess perks. Further analyses reveal that CEOs’ hometown identity substitutes for external and internal governance mechanisms in curbing the consumption of excess perks. The study advances research on the role of inner psychological factors in influencing agency costs and offers valuable practical implications on how to reduce the overall cost for a firm to control the agency problem.

Keywords: Hometown identity; Excess perks; External governance mechanisms; Internal governance mechanisms (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322007309

DOI: 10.1016/j.frl.2022.103554

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