The Impact of External CEO Power on Corporate Social Responsibility

This study investigates the problem of externally hired powerful CEOs and how they affect CSR performance for their respective firm. The data used was from the Wharton Research Data Services - CRSP database from 1993 to 2016. This work starts by looking at how the dependent variables affect the debt level of the firms, then how the explanatory variables affect the CSR performance by controlling for the time fixed effect and solving the endogeneity problem. A few conclusions were found, CEO gender and tenure influence a firm’s CSR performance. The CEO’s age does not appear to affect the CSR performance of the firms. Furthermore, Externally hired CEOs care more about the firms CSR performance more than internally promoted CEOs and powerful CEOs do not invest more on CSR activities.