Exploring the nexus between CEO psychological biases, corporate social responsibility and corporate governance: Evidence from the European real estate companies

Amel Kouaib, Asma Bouzouitina, Anis Jarboui

Research output: Contribution to journalJournal articlepeer-review

1 Scopus citations

Abstract

This paper investigates the liaison between chief executive officer (CEO) psychological biases and corporate social responsibility (CSR). It uses a sample of 450 European real estate firm-year-observations indexed on STOXX Europe 600 Index from 2009 to 2018. To test the developed hypotheses, feasible generalised least square (FGLS) regression is applied. Findings suggest that CEOs' narcissism and overconfidence are significant factors in determining firms' incentives to undertake CSR activities. Further, it is found that an effective CG practices significantly moderates CEOs behaviour regarding corporate social responsibility engagement. The study's importance lies in the overview it provides of CSR performance in the European real estate industry. As corporate governance can have a major impact in CEOs' behaviour regarding corporate social responsibility, the author recommends firms to improve corporate governance in listed European real estate firms. Research on individual determinants of corporate social responsibility, especially psychological factors of top executives, is a field where progress is needed. This paper contributes to the existing literature with two empirical novelties: 1) providing a novel insight into CSR involvement using a sample of European real estate sector; 2) investigating the moderating effect of the corporate governance mechanisms in listed European real estate companies.

Original languageEnglish
Pages (from-to)183-208
Number of pages26
JournalInternational Journal of Managerial and Financial Accounting
Volume13
Issue number2
DOIs
StatePublished - 2021

Keywords

  • CEO's psychological biases
  • Corporate governance score
  • Corporate social responsibility
  • CSR
  • European real estate industry

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