CEO Materialism and Corporate Social Responsibility

Robert Davidson
McDonough School of Business, Georgetown University

Aiyesha Dey
Carlson School of Management, University of Minnesota

Abbie J. Smith
The University of Chicago Booth School of Business

March 2016


We study the role of individual CEOs in explaining corporate social responsibility (CSR) scores. We show that CEO fixed-effects explain 63% 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, and increases in CEOs’ materialism are associated with declining scores. Finally, CSR scores in firms with non-materialistic CEOs are positively associated with accounting profitability. 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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