Influence of Narcissistic CEOs on Corporate Social Responsibility (CSR) Choices: The Moderating Role of the Legal Environment

Abstract

Purpose

During recent years, there has been a growing interest in CSR across disciplines. Various scholars document that Chief Executive Officer (CEO) narcissism is an important factor that should not be overlooked when analyzing CSR. Research on the relationship between CEO narcissism and CSR has treated CSR as a whole construct. However, little attention has been paid to its effect on different dimensions of CSR, especially the same psychological trait may have effects on charitable donations and employee welfare. The purpose of the study is to explore the relationship between CEO narcissism and charitable donations and employee welfare, while taking into account the moderating role of the legal environment.

Methods

This study used the video survey method to measure CEO narcissism, the video information was obtained from Baidu.com and hao.360.com search engines. Other data were collected from Chinese Stock Market Research (CSMAR) database. We used OLS regression for data analysis and also used Tobit regression model to check the robustness of the estimation results. Meanwhile, all analyses will be performed with Stata 16.0 software.

Results

Empirical analysis reveals that CEO narcissism has a positive and significant impact on charitable donations and has a negative and significant impact on employee welfare. Moreover, the legal environment will reduce the effect of CEO narcissism on charitable donations and employee welfare, indicating that a stronger legal environment could attenuate the effect of CEO personality traits, especially narcissism on charity donations and employee welfare.

Conclusion

This study contributes to the behavioral finance theory and stakeholder theory to better understand the relationship between CEO narcissism and charitable donations and employee welfare. Meanwhile, this study is one of the few studies to investigate the patterns of CSR activities in China, an important emerging economy.

Keywords:

• CSR
• CEO
• legal environment
• charitable donation
• employee welfare
• personality traits

Data Sharing Statement

The datasets used and/or analyzed during this study are available from the corresponding author on reasonable request [email protected].

Ethical Statement

This study was approved by the Ethics Committee of Dongbei University of Finance and Economics and complied with the Declaration of Helsinki. We explicitly informed the raters of the objectives of the study and guaranteed their confidentiality and anonymity. Meanwhile, all raters voluntarily made their decision to complete surveys.

Acknowledgments

We would like to thank all participants in the study.

Disclosure

The authors report no conflicts of interest in this work.

Additional information

Funding

This work was supported by Chongqing Social Science Planning and Cultivation Project (NO.2020PY54), Major Program of the National Social Science Funds of China (11&ZD153), Graduate Research Project of School of Business Administration in Dongbei University of Finance and Economics (GSY202321), China National Annual Fund for Philosophy and Social Sciences in 2019 (NO.19BKS117).