Hometown CEOs and corporate financialization✰
Cuiliang Lin and
Yue'e Long
Finance Research Letters, 2025, vol. 76, issue C
Abstract:
Corporate financialization refers to the process in which non-financial firms focus on financial activities for short-term gains, potentially harming core business activities of the company and causing economic bubble risks. This paper investigates the impact of hometown CEOs on corporate financialization. Based on data from Chinese listed companies, we find that hometown CEOs are less likely to conduct corporate financialization. Furthermore, we identify that hometown CEOs reduce corporate financialization by alleviating financial constraints and decreasing short-sighted orientation. Moreover, the relationship is more pronounced when CEOs possess more discretionary power and enhanced capabilities.
Keywords: Hometown identity; Financial constraints; Short-sighted orientation; Corporate financialization (search for similar items in EconPapers)
JEL-codes: G10 G23 M40 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:76:y:2025:i:c:s1544612325002375
DOI: 10.1016/j.frl.2025.106973
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