CEO Career Concern and Corporate ESG Performance: Evidence from China

Abstract

Purpose – From the perspective of upper echelon theory and career focus, this study examines the impact of CEO career concern on corporate environmental, social, and corporate governance (ESG) performance and the moderating role of CEO characteristics. Design/methodology/approach – Multiple regression analysis is conducted using data from 2011‒2020 on Chinese A-share companies listed in Shanghai and Shenzhen to empirically test whether CEO career concern promotes or inhibits corporate ESG performance. Corporate ESG performance is determined using both the Bloomberg ESG and China Securities ESG performance indicators. Findings – The results indicate that CEOs with high career concern can inhibit corporate ESG performance, and they are robust using propensity score matching, instrumental variables, and lagging the dependent variable to address endogeneity. Additionally, CEO shareholding and CEO political affiliation have a negative moderating effect on the relationship between CEO career focus and corporate ESG performance. Research limitations/implications – First, given the limited research conditions, we use secondary data to explore the role of CEO career concern in ESG performance. Second, although the indirect measure of the CEO's career concern based on age is supported by relevant literature, it cannot completely portray the degree of career concern, and future studies can design more comprehensive and objective indicators. Finally, we analyze only two mechanisms, CEO shareholding and CEO political affiliations, which may not be sufficiently comprehensive. Practical implications – This study expands the investigation of factors influencing corporate ESG performance by adopting a new perspective, offering implications for improving CEO regulation, promoting corporate transformation, and enhancing ESG performance. Originality/value –This study offers three contributions to the existing literature.  First, most studies on CEO career concern concentrate on micro-firm behavior.  We also examine the impact of CEO shareholding and political affiliations on CEO career concern and corporate ESG performance in the context of the Chinese market, complementing related research on the economic consequences of CEO career concern. Second, this study expands the research perspective on the factors influencing ESG performance.   Third, unlike most existing studies that consider only a single ESG evaluation dimension as an explanatory variable, we investigate the impact of CEO career concern on ESG using two influential ESG ratings to provide more comprehensive and robust evidence for understanding the relationship between CEO career concern and corporate ESG performance.