Does CEO social capital affect corporate ESG performance?

This paper empirically examines the relationship between CEO (Chief Executive Officer) social capital and corporate ESG (Environment, Social and Governance) performance. Using a sample of A-share listed companies in Shanghai and Shenzhen from 2010 to 2020, the paper finds a negative correlation between CEO social capital and corporate ESG performance. In addition, we also consider how the firm's market trading activity and CEO duality moderates the impact of CEO social capital on firms' ESG, and both are concluded to be positively moderated. Upon further research, we also find that (1) the positive contribution of CEO's social capital to firms' ESG performance is more significant in state-owned enterprises. (2) The negative facilitating effect of CEO's social capital on corporate ESG performance is more significant in large-scale enterprises. (3) ESG practices lead to the loss of shareholder wealth, resulting in the reduction of corporate value. The results of the study deepen the knowledge of academics and practitioners about the value-creating function of CEO social capital, and provide empirical evidence for listed companies to pay attention to and make use of CEO social capital to enhance their corporate social responsibility commitment.