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From native soil to boardroom: the role of home CEOs in driving firm performance.

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Titel: From native soil to boardroom: the role of home CEOs in driving firm performance.
Autoren: Mitra, Gaurav1 (AUTHOR), Gupta, Vandana1 (AUTHOR), Gupta, Gaurav1 (AUTHOR) gaurav.gupta@fsm.ac.in
Quelle: Applied Economics. Nov2025, p1-16. 16p.
Schlagwörter: *ORGANIZATIONAL performance, *CHIEF executive officers, *MANUFACTURING industries, *ORGANIZATIONAL sociology, *STAKEHOLDER analysis, *PSYCHOLOGICAL ownership, LOCAL knowledge, REGIONAL identity (Psychology)
Geografische Kategorien: SOUTH India
Abstract: This study investigates the effect of home CEOs (CEOs leading firms located in their native regions) on the performance of Indian manufacturing firms. Using two-step difference generalized method of moments, we address potential endogeneity concerns and provide robust evidence that home CEOs improve firm performance (i.e. return on assets). These results are consistent under multiple robustness tests, including alternative measures of firm performance and home CEO, sensitivity tests, COVID-19 period dummies, and a non-linear analysis using instrumental variable quantile regression. Additional analyses reveal three important findings. First, home CEOs strengthen firms’ market performance (i.e. Tobin’s Q). Second, CEOs originating from North or South India contribute positively to firm performance when leading in their home regions. Third, CEOs from non-megacities enhance the performance of firms in megacities. Our findings extend the existing literature by highlighting the role of CEO geographical identity in shaping firm outcomes, thereby broadening the scope of upper echelons theory. The results also provide novel support for place attachment, place identity, and psychological ownership theories showing that CEOs’ native-place ties generate advantages through local knowledge, stakeholder alignment, and stewardship behaviours. The findings of this study have several implications for firms’ stakeholders and governance. [ABSTRACT FROM AUTHOR]
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Datenbank: Business Source Index
Beschreibung
Abstract:This study investigates the effect of home CEOs (CEOs leading firms located in their native regions) on the performance of Indian manufacturing firms. Using two-step difference generalized method of moments, we address potential endogeneity concerns and provide robust evidence that home CEOs improve firm performance (i.e. return on assets). These results are consistent under multiple robustness tests, including alternative measures of firm performance and home CEO, sensitivity tests, COVID-19 period dummies, and a non-linear analysis using instrumental variable quantile regression. Additional analyses reveal three important findings. First, home CEOs strengthen firms’ market performance (i.e. Tobin’s Q). Second, CEOs originating from North or South India contribute positively to firm performance when leading in their home regions. Third, CEOs from non-megacities enhance the performance of firms in megacities. Our findings extend the existing literature by highlighting the role of CEO geographical identity in shaping firm outcomes, thereby broadening the scope of upper echelons theory. The results also provide novel support for place attachment, place identity, and psychological ownership theories showing that CEOs’ native-place ties generate advantages through local knowledge, stakeholder alignment, and stewardship behaviours. The findings of this study have several implications for firms’ stakeholders and governance. [ABSTRACT FROM AUTHOR]
ISSN:00036846
DOI:10.1080/00036846.2025.2588496