Business
CEOS’ CULTURAL HERITAGE COULD AFFECT CORPORATE PERFORMANCE
Published by Gbaf News
Posted on November 3, 2017
5 min readLast updated: January 21, 2026
Global Banking & Finance Review®
Company
Published by Gbaf News
Posted on November 3, 2017
5 min readLast updated: January 21, 2026
Business School research suggests cultural heritage can influence corporate profitability and success.
Led by academics from University of Edinburgh Business School and The University of St Andrews, the study analysed the performance of banks directed by more than 600 US-born Chief Executive Officers who were children or grandchildren of immigrants.
The study found leaders whose cultural heritage emphasises restraint, group-mindedness, and long-term orientation were safer, more cost efficient and as a result more likely to outperform under pressure.
It suggests CEOs of German, Italian, Polish and Russian heritage were associated with delivering 6.2% higher profitability than average under competitive pressures. Those with British or Irish heritage demonstrated no difference in performance to the market average.
Researchers analysed data on national cultural characteristics from the GLOBE Project and the World Value Survey. Information on publicly listed US banks’ performance from 1994 – 2006 was then compared to ancestral records on their CEOs from the world’s largest genealogy database, Ancestry.com.
Professor Jens Hagendorff, Chair in Finance at the University of Edinburgh Business School, said:
“At a time when the economic benefits of immigration are increasingly questioned, our study offers a glimpse of the positive and lasting contribution that people of immigrant heritage make in the business world.”
Dr Louis Nguyen, Lecturer from the School of Management at the University of St Andrews, said:
“Cultural heritage is a topic of significant interest to policymakers. A growing body of research shows that managerial traits explain a lot of the variation in a firm’s capital structure, investment, and profitability.
“These studies investigate the usual attributes, such as age, gender, experience, and educational achievement but the role of cultural heritage in shaping managerial behaviour and firm outcomes has been overlooked.
“Our research shows that the cultural values that can be traced back generations ago can influence decision-making in the present time. This implies that culture is deeply-rooted and slow-moving. Our study is especially timely, given the ongoing debate about immigrants around the world.”
DrArmanEshraghi, Senior Lecturer in Finance at University of Edinburgh Business School, co-authored the study. He said:
“This study provides a nuanced understanding of the role of culture in financial decision making. Our findings unambiguously show that diversity matters in the banking sector, and by implication, in similar finance organisations.
“In particular, we focus on the diversity of cultural background which is often overlooked in the common discourse that chooses to focus on gender diversity – given it is easier to measure.”
The full journal article ‘Does a CEO’s cultural heritage affect performance under competitive pressure?’ is available online: https://academic.oup.com/rfs/article/3835432/Does-a-CEO-s-Cultural-Heritage-Affect-Performance
Business School research suggests cultural heritage can influence corporate profitability and success.
Led by academics from University of Edinburgh Business School and The University of St Andrews, the study analysed the performance of banks directed by more than 600 US-born Chief Executive Officers who were children or grandchildren of immigrants.
The study found leaders whose cultural heritage emphasises restraint, group-mindedness, and long-term orientation were safer, more cost efficient and as a result more likely to outperform under pressure.
It suggests CEOs of German, Italian, Polish and Russian heritage were associated with delivering 6.2% higher profitability than average under competitive pressures. Those with British or Irish heritage demonstrated no difference in performance to the market average.
Researchers analysed data on national cultural characteristics from the GLOBE Project and the World Value Survey. Information on publicly listed US banks’ performance from 1994 – 2006 was then compared to ancestral records on their CEOs from the world’s largest genealogy database, Ancestry.com.
Professor Jens Hagendorff, Chair in Finance at the University of Edinburgh Business School, said:
“At a time when the economic benefits of immigration are increasingly questioned, our study offers a glimpse of the positive and lasting contribution that people of immigrant heritage make in the business world.”
Dr Louis Nguyen, Lecturer from the School of Management at the University of St Andrews, said:
“Cultural heritage is a topic of significant interest to policymakers. A growing body of research shows that managerial traits explain a lot of the variation in a firm’s capital structure, investment, and profitability.
“These studies investigate the usual attributes, such as age, gender, experience, and educational achievement but the role of cultural heritage in shaping managerial behaviour and firm outcomes has been overlooked.
“Our research shows that the cultural values that can be traced back generations ago can influence decision-making in the present time. This implies that culture is deeply-rooted and slow-moving. Our study is especially timely, given the ongoing debate about immigrants around the world.”
DrArmanEshraghi, Senior Lecturer in Finance at University of Edinburgh Business School, co-authored the study. He said:
“This study provides a nuanced understanding of the role of culture in financial decision making. Our findings unambiguously show that diversity matters in the banking sector, and by implication, in similar finance organisations.
“In particular, we focus on the diversity of cultural background which is often overlooked in the common discourse that chooses to focus on gender diversity – given it is easier to measure.”
The full journal article ‘Does a CEO’s cultural heritage affect performance under competitive pressure?’ is available online: https://academic.oup.com/rfs/article/3835432/Does-a-CEO-s-Cultural-Heritage-Affect-Performance
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