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Journal of Business Ethics

, Volume 153, Issue 3, pp 859–876 | Cite as

Doing Good Business by Hiring Directors with Foreign Experience

  • Jian Zhang
  • Dongmin Kong
  • Ji Wu
Original Paper
  • 404 Downloads

Abstract

Using a manually collected dataset on the overseas experiences of directors of Chinese listed firms, we examine the effects of returnee directors on firms’ corporate social responsibility (CSR) engagement. Our results show that returnee directors significantly improve their firms’ CSR engagement. The positive relationship between the percentage of returnee directors and CSR engagement is more significant when a firm is in a competitive industry, when a firm has no government ownership, when a firm’s CEO is not politically connected, and when a firm’s CEO is older. Furthermore, we find that only long-term foreign professional or academic experience matters, whereas short-term visiting experience does not. Finally, our results are robust after controlling for endogeneity. Therefore, this paper offers clear policy implications by suggesting that hiring more returnees as corporate directors is an efficient way to enhance firms’ CSR, which may be of particular interest to regulators in emerging markets.

Keywords

Corporate social responsibility Returnee directors China 

Notes

Acknowledgements

We would like to thank the editor, Prof. Joelle Vanhamme, two anonymous referees for their valuable comments and suggestions. We also thank Shasha Liu, Juan Luo, Yawen Qiu, Rui Shen, and Limin Xu for their comments and suggestions that have greatly improved the paper. We also wish to thank the participants of the 2015 Auckland Finance Meeting, New Zealand, and the seminar in the Sun Yat-sen University in 2016 for their comments and suggestions on earlier versions of this paper. Dongmin Kong acknowledges the financial support of National Natural Science Foundation of China (71372130 and 71173078).

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Authors and Affiliations

  1. 1.School of FinanceSouthwestern University of Finance and EconomicsChengduPeople’s Republic of China
  2. 2.School of FinanceZhongnan University of Economics and LawWuhanPeople’s Republic of China
  3. 3.School of Economics and Finance, Massey Business SchoolMassey University – Albany CampusAucklandNew Zealand
  4. 4.School of EconomicsHuazhong University of Science and TechnologyWuhanPeople’s Republic of China

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