CEO Materialism and Corporate Social Responsibility

Robert H Davidson
Pamplin School of Business, Virginia Polytechnic Institute and State University

Aiyesha Dey
United States Securities and Exchange Commission
Carlson School of Management, University of Minnesota

Abbie J Smith
The University of Chicago Booth School of Business

February 2017


We study the role of individual CEOs in explaining corporate social responsibility (CSR) scores. We show that CEO fixed-effects explain 56% of the variation in CSR scores, a significant portion of which is attributable to a CEO’s “materialism” (relatively high luxury asset ownership). Specifically, firms led by materialistic CEOs have lower CSR scores, fewer strengths, and more weaknesses. Finally, we document that CSR scores in firms with non-materialistic CEOs are positively associated with accounting and market performance. In contrast, CSR scores in firms with materialistic CEOs are unrelated to profitability on average; however this association is decreasing in CEO power.

Keywords: Executive materialism; corporate social responsibility, accounting profitability.

JEL Classification Codes: G30; G34; G38

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