Working Paper: NBER ID: w19557
Authors: Luigi Guiso; Paola Sapienza; Luigi Zingales
Abstract: We study which dimensions of corporate culture are related to a firm's performance and why. We find that proclaimed values appear irrelevant. Yet, when employees perceive top managers as trustworthy and ethical, firm's performance is stronger. We then study how different governance structures impact the ability to sustain integrity as a corporate value. We find that publicly traded firms are less able to sustain it. Traditional measures of corporate governance do not seem to have much of an impact.
Keywords: Corporate Culture; Integrity; Firm Performance; Governance Structures
JEL Codes: G30; Z1
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| perceived integrity (L15) | Tobin's Q (G19) |
| perceived integrity (L15) | profitability (L21) |
| perceived integrity (L15) | unionization rates (J50) |
| publicly traded firms (G34) | integrity levels (L15) |
| governance structures (G38) | integrity (L15) |
| large shareholder (G34) | integrity levels (L15) |