We examine the association between CEO birthplace proximity and financial misconduct. We find that CEOs managing firms near their birthplaces (home CEOs) are associated with less financial misconduct compared to other CEOs. This association is not attributable to differences in corporate governance. The relationship strengthens in areas with a strong local investment presence and greater religious commitment as well as among CEOs with longer tenures in their home state. Our findings are robust to addressing potential selection and omitted variable biases as well as to conducting multiple robustness tests, including analyses of involuntary CEO changes and headquarters relocations. We also find a similar association for CFOs, with firms employing home CFOs exhibiting less financial misconduct.

We develop an optimal tax-timing model that takes into account asymmetric long-term and short-term tax rates for positive capital gains and limited tax deductibility of capital losses. In contrast to the existing literature, this model can help explain why many investors not only defer short-term capital losses to long term but also defer large long-term capital gains and losses. Because the benefit of tax deductibility of capital losses increases with the short-term tax rates, effective tax rates can decrease as short-term capital gains tax rates increase.

Exploiting a unique setting in China where internal controls are intended to manage risks, we investigate how internal controls shape the cash holding policies. Results show that firms with higher internal control quality (ICQ) are less likely to have abnormal cash holdings, either excess or deficit cash, and this effect is not driven by corporate governance quality. We also find that firms with higher ICQ are more likely to increase dividend payments and are less likely to increase M&A investments, especially when the firms have had a negative experience with prior M&A investments. Furthermore, our tests on the market valuation of cash holdings show that investors place a higher value on cash holdings of firms with higher ICQ. Collectively, our findings suggest that internal controls help companies shape reasonable cash policies that lead to value creation.

Addressing income inequality is crucial for ensuring equitable and prosperous societies. This study examines the impact of the local press on intrafirm pay disparity. By using recently mandated disclosures of CEO-worker pay ratios and analyzing the staggered shutdown of local newspapers, we find that within-firm pay disparity increases by 8.2 percent following local newspaper closures. Further analysis suggests that this post-closure increase in pay disparity ratio is unlikely to be driven by either CEO compensation or worker pay alone or underlying economic conditions but instead reflects reduced concerns over reputational damage. Overall, our findings are consistent with local newspapers’ playing an important role in disseminating CEO-worker pay ratios and amplifying their reputational effects, thereby shaping and monitoring within-firm pay disparity. Data Availability: Data used in this study are available from public sources identified in the paper.

We examine the relation between home CEOs and corporate social responsibility (CSR). Our analysis shows home CEOs are associated with higher CSR engagement and increased firm value. These firms exhibit higher asset turnover, lower cost of equity , improved productivity, sales, and profit margins. Home CEOs focus more on community, environmental, and employee-related CSR, and are linked to reduced carbon emissions . This relationship is stronger in firms with higher local business concentration and investor monitoring. Firms led by home CEOs earn higher returns during recent crises. Our results suggest the value increase is not primarily due to agency effects and remain robust to endogeneity concerns. The study indicates a CEO’s community connection may influence CSR effectiveness, suggesting that mere CSR engagement may not suffice to boost trust and value. These results highlight the potential importance of local ties in corporate leadership and CSR strategy.