Implicit Incentives:The Internal Mechanism Of CEO Reputation Affecting Corporate Social Responsibility

Xi Jinping emphasized in the Entrepreneurs Symposium in July 2020 that taking social responsibility is a specific requirement for entrepreneurs in the new era.Only by actively taking social responsibility can entrepreneurs gain the recognition of the country and the people,and they are entrepreneurs who conform to the requirements of the new era and have spirit.Therefore,enterprises and their managers need to respond to the call of the state,actively participate in social responsibility activities,and pay certain enterprise resources to enhance social well-being.This was originally the proper meaning of an enterprise,but the problem is that in the face of the environment where internal and external risks coexist,these resources may not be rewarded in the short term and support the sustainable operation of the enterprise,thus promoting the enterprise to actively assume social responsibility.Therefore,enterprises need to match their own resources with the external environment and carry out strategic management of corporate social responsibility.As the decision-maker of corporate social responsibility strategy,the reputation characteristics of CEO(Chief Executive Officer)bring competitive advantage to CEO through reputation premium and motivate his decision-making behavior.This phenomenon causes people to pay attention to reputation and the behavior of high-reputation CEO.Academic circles have explored the influence of CEO reputation in many ways,focusing on the individual level,company level and system level of reputation,and put forward the theoretical framework of reputation incentive.Most of the existing studies embed CEO reputation effect into effective contract hypothesis and rent-seeking hypothesis to open the"black box" of reputation incentive,but few studies are based on CEO’s psychological action path to explore whether CEO reputation can motivate CEO’s decision-making behavior through implicit path.Based on the above background,this study uses literature research and empirical analysis to explore the impact of CEO reputation on corporate social responsibility mechanism.After systematically combing the relevant literature,this paper selects contract theory,reputation incentive theory and approach/avoidance principle to construct the relationship between CEO reputation and corporate social responsibility,and puts forward the intermediary path between explicit incentive and implicit incentive,and considers the moderating effect of external environmental system.Therefore,the annual data of 273 companies with Runling social responsibility rating for five consecutive years and CEO in office for three consecutive years from 2014 to 2018 are selected as research samples to demonstrate the main effect of CEO reputation on corporate social responsibility,the mediating effect of power allocation and CEO overconfidence,and the regulating effect of legal environment and political connection.The results show that CEO reputation is positively correlated with corporate social responsibility.Overconfidence plays a mediating role of implicit incentive in the process of CEO reputation affecting corporate social responsibility;Legal environment and political connections can weaken the positive correlation between CEO reputation and corporate social responsibility.This study has made some progress in exploring the internal mechanism and boundary of CEO reputation affecting corporate social responsibility,enriching the research content of CEO characteristics to a certain extent,and providing a new practical direction for promoting corporate social responsibility.