Presenter: Daniel Neukirchen, Technische Universität Dortmund

Title: Frontier Culture and Corporate Misconduct

Abstract: We examine whether the culture of “rugged individualism” prevalent in U.S. counties with longer historical frontier exposure affects firms headquartered in these counties. Consistent with the idea that individualism can foster unethical behavior, we show that firms in frontier counties engage in more (environmental and social) misconduct. The effects are stronger for geographically concentrated firms, those with weak governance, and in counties with low social capital and population mobility. Additionally, firms in frontier counties are more likely to have CEOs born in frontier counties. However, while these CEOs are generally associated with more misconduct, they do not amplify, but may substitute for, the community culture effects.

Host: Thomas Kokholm