Home Bias and Corporate Environmental Social Responsibility

This paper analyzes the impact of executives' hometown identification on corporate environmental social responsibility (CESR) using a sample of Chinese A-share-listed companies from 2007 to 2018. It finds that: the CESR scores of companies are higher when executives work in their hometowns, indicating that executives' hometown identification significantly improves the fulfillment of CESR; mechanism tests show that the above relationship is more significant in regions with superior environmental quality, indicating that executives take CESR more seriously in their hometowns more due to social pressure; further tests found that executive characteristics, such as executive type and age, have a regulating effect on this relationship. In addition, the nature of property rights of listed companies also affects executives' hometown identification. Executives of state-owned enterprises have a stronger hometown identification, which enhances the fulfillment of CESR to a higher extent. In the context of the micro level of the enterprise, this paper provides positive evidence that an informal system, named as "hometown identity", can enhance the performance of CESR and the pressure effect implicitly behind the social network, which enriches and expands the research related to CESR fulfillment.