The main purpose of this paper is to look at the link between chief executive officer (CEO) behavior and corporate social responsibility (CSR) engagement with the moderating role of bank risk-taking behavior.
Based on a 13-year data set (2007–2019), the authors applied the feasible generalized least squares with panel data to test the hypotheses.
The findings reveal a positive and significant link between CEO behavior and CSR engagement. Based on these findings, it can be argued that the characteristics of the CEO of the banks would improve the CSR strategies. Furthermore, the study suggests a moderating effect of bank risk-taking in the link between psychological bias and corporate social responsibility engagement (CSR engagement).
As CEO behavioral characteristics are essential to understanding CSR practice, boards of directors should consider the behavioral traits of dominant and overconfident CEOs while designing CSR practices.
If the bank behaves in a socially responsible manner, direct and indirect stakeholders may be able to evaluate the level of risk-taking in more detail.
This research highlights the importance of CEO behavior characteristics for CSR, which is a crucial application that supports the upper echelons theory; and fills a gap in literature research. It is one of the few studies examining the interaction between risk-taking, CEO behavior and CSR engagement.
