Local Power: Chairman's Hometown Identity and Enterprise ESG Performance

Abstract

Based on the data of senior executives of Shanghai and Shenzhen A-share listed companies from 2008 to 2021, this paper constructs the hometown identity of the chairman and empirically tests its impact on the performance of ESG. The study finds that the chairman's hometown identity can positively promote the firm's ESG performance.,  This paper explores the moderating effects of hometown identity and firm ESG performance from the perspective of online media attention and financing constraints. The results show that the companies with low online media attention and high financing constraints tend to have poor ESG performance, and the chairman's hometown identity can effectively improve the ESG performance of these two types of companies. The results show that encouraging entrepreneurs return to their  hometowns to start their businesses and considering hometown identity when hiring can improve the ESG performance of enterprises. This study not only broadens the perspective of informal institutions at the top management level, but also provides a strong scientific basis for improving ESG performance.