 CEOs’ multicultural backgrounds and firm innovation: Evidence from ChinaKailun Li, Yifei Xia and Jianing Zhang Finance Research Letters, 2023, vol. 57, issue C Abstract: We examine the effect of CEOs’ multicultural backgrounds, which play a critical role in shaping an individual’s personality, on firms’ innovation outputs. Employing the number of dialects in a CEO’s birthplace as a proxy for cultural diversity, we focus on language-related cultural influence while controlling for experience-related cultural influence. Our hypothesis posits that the multicultural background makes the CEO more open-minded and adventurous and, therefore, more likely to invest in firm innovation. We find that CEOs with multicultural backgrounds devote more effort to and perform better on innovation than those without multicultural backgrounds. Cross-sectional analyses show that this positive effect of CEOs’ multicultural backgrounds on innovation output is more pronounced when the firm is exposed to higher industry competition and when the information environment is more transparent. Our findings contribute to the literature on CEO characteristics by providing evidence of how the CEO’s multicultural background induces alterations in the firm’s innovation effort and performance. Keywords: Multicultural background; Chinese dialects; CEO characteristics; Firm innovation (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:57:y:2023:i:c:s154461232300627x DOI: 10.1016/j.frl.2023.104255 Access Statistics for this article Finance Research Letters is currently edited by R. Gençay More articles in Finance Research Letters from Elsevier |
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