Connected to risk: CEOs’ hometown connections and firm-level political risk in China

Bin Wang, Liang Wang, Kaicheng Liao and Xin Li

Applied Economics Letters, 2025, vol. 32, issue 16, 2281-2284

Abstract: This paper investigates the nexus between CEOs’ hometown connections and firm-level political risk by employing a sample of Chinese listed firms from 2011 to 2020. Our findings show that CEOs’ hometown connections mitigate firm-level political risk. The above finding remains valid after ruling out the explanation of the firm’s local embeddedness and conducting IV regression estimation. Then, we further discuss the potential interaction effect of CEO age and CEO duality. Therefore, we deepen the understanding of the advantage of CEOs’ hometown connections and show a plausible mitigating factor of the political risk faced by firms.

Date: 2025
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DOI: 10.1080/13504851.2024.2332572

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