CEO overseas experience and sustainability report disclosure: Evidence from Indonesia

Siti Nur Aini, Iman Harymawan, Mohammad Nasih and Khairul Anuar Kamarudin

Corporate Social Responsibility and Environmental Management, 2024, vol. 31, issue 6, 5837-5849

Abstract: This study examines the relationship between chief executive officers' (CEOs) overseas experience and social responsibility (SR) disclosure, as well as how CEOs from reputable universities can moderate this relationship. Using 488 firm‐year observations from firms listed on the Bursa Efek Indonesia (Indonesian Stock Exchange) and data from the Global Reporting Initiative databases from 2010 to 2021, this study finds a significant negative association between foreign‐educated CEOs (CEO overseas experience) and SR disclosure. This study also finds that CEOs from reputable universities can weaken this relationship. The results are robust to endogeneity tests using the coarsened exact match (CEM) and Heckman's two‐stage regressions. Furthermore, overseas experience CEOs have a significantly negative impact on all dimensions of SR disclosure, except for the environmental and product dimensions. Investors may consider CEOs' foreign education as an additional factor in their investment decisions. This study suggests that firms with CEOs with international exposure tend to exhibit lower levels of SR disclosures. This insight can aid investors in evaluating sustainability and ethical performance by aligning their investment portfolios with CSR objectives and preferences.

Date: 2024
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https://doi.org/10.1002/csr.2883

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Persistent link: https://EconPapers.repec.org/RePEc:wly:corsem:v:31:y:2024:i:6:p:5837-5849

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