Stories and Societies: How Fiction-Reading CEOs Affect Corporate Philanthropy

Abstract This study examines how CEOs’ hobby of reading fiction reinforces empathy and, in turn, is associated with higher corporate philanthropy. Grounded in the Empathy–Altruism Hypothesis, we propose that fiction-reading sustains and deepens a multidimensional yet integrated empathic capacity, which motivates prosocial organizational decisions. With a large dataset of CEOs from non-state-owned enterprises (non-SOEs) listed in China’s A-share market from 2001 to 2018, we show robust evidence that firms led by fiction-reading CEOs engage more in corporate philanthropy; additionally, we confirm that empathy mediates this positive relationship. Furthermore, a difference-in-differences analysis with CEO transition data reveals a significant increase in corporate philanthropy with a newly appointed fiction-reading CEO. Supplementary results show that fiction-reading CEOs promote broader prosocial practices, including employee welfare and ethical governance. By introducing fiction-reading as an unobtrusive, verifiable measure of empathy, this study offers a novel methodological approach for tracing the micro-foundations of corporate social responsibility.