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Professor of Strategy
CEO Pre-career Experience; Religion; Risk-Taking; Innovation; Corporate Governance
Chen G., Luo S., Tang Y., Tong J. Y. (2023). Back to School: CEOs’ Pre-career Exposure to Religion, Firm’s Risk-Taking, and Innovation Journal of Management, 49(3), pp. 881-912.
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. The authors' 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, the authors 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, the authors find strong support on their 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.The authors discuss the implications of their study for the strategic leadership literature, firm's risk-taking, and innovation research.