Back to School: CEOs’ Pre-Career Exposure to Religion, Firm's Risk-Taking, and Innovation

Recent research has shown that a CEO's personal experiences in his or her early days have an influence on his or her decision-making as an executive later on. Our study extends this emerging stream of research by examining how CEOs’ pre-career exposure to religion affects their firms’ risk-taki...

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Bibliographic Details
Published in:Journal of management 2023-03, Vol.49 (3), p.881-912
Main Authors: Chen, Guoli, Luo, Shuqing, Tang, Yi, Tong, Jamie Y.
Format: Article
Language:English
Subjects:
Chief executives
Companies
Decision making
Developmental psychology
Imprinting
Innovations
Leadership
Personal experiences
Religion
Religious participation
Risk behavior
Risk taking
Top management
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Summary:Recent research has shown that a CEO's personal experiences in his or her early days have an influence on his or her decision-making as an executive later on. Our study extends this emerging stream of research by examining how CEOs’ pre-career exposure to religion affects their firms’ risk-taking and subsequent innovation performance. Drawing upon developmental psychology research and imprinting theory, we argue that CEOs who have attended a religious college are more likely to develop or reinforce their risk-averse mentality. This carries over to their professional life when they are in a top management position, and it leads to less risk-taking behavior in their firms and ultimately a lower level of firm innovation. Using a large sample of U.S. publicly listed companies, we find strong support on our hypotheses: Firms managed by CEOs who attended a religious college tend to be less risk-taking; this effect is stronger when the firm has more board members with pre-career exposure to religion; in addition, the firm's risk-taking behavior mediates the negative relationship between CEO pre-career religious exposure and firm innovation. We discuss the implications of our study for the strategic leadership literature, firm's risk-taking, and innovation research.
ISSN:0149-2063
1557-1211
DOI:10.1177/01492063221076816