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

Authors: Amel Kouaib; Asma Bouzouitina; Anis Jarboui

Addresses: Accounting Department, School of Business, King Faisal University, Al Ahsa, KSA; Faculty of Economics and Management of Sfax, Accounting Department, University of Sfax, Tunisia ' University of Sfax, Airport Road, Sfax, Tunisia ' University of Sfax, Airport Road, Sfax, Tunisia

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.

Keywords: CEO's psychological biases; corporate social responsibility; CSR; corporate governance score; European real estate industry.

DOI: 10.1504/IJMFA.2021.117761

International Journal of Managerial and Financial Accounting, 2021 Vol.13 No.2, pp.183 - 208

Received: 22 Feb 2021
Accepted: 20 Mar 2021
Published online: 23 Sep 2021 *

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