DOES CEO CHILDHOOD SOCIOECONOMIC STATUS IMPACT THE INSTITUTIONAL POWER CONCENTRATION?

Puya Kahhali
University of California, Riverside

ABSTRACT

Chief Executive Officers (CEOs) have been an important focus in strategy research for
the past decade. Prior literature has explored several different CEO demographics, such as
education, social ties, social capital, power, and behavior. While preceding literature has shown
to link CEO demographics to different behavioral aspects, the focus on CEO historical
background is rather rare. Surprisingly, no research has focused on CEO childhood and its
impact on institutional power concentration. This study addresses two questions: (1) How CEO
socioeconomic status during developmental years (childhood to adulthood) relates to his/her
desire to concentrate power, which is in turn reflected through institutional power concentration?
and (2) Do firms led by CEOs who grew up in middle SES families have higher levels of power
concentration than firms led by CEOs who grew up in low and high SES families? The findings
reveal that firms led by middle SES CEOs tend to be more entrenched as measured by the E-index
compared to firms led by low and high SES CEOs.
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Keywords: CEO, socioeconomic status, childhood development, power, anxiety, control