Do CEO characteristics influence a firm’s investment in brand equity? Evidence from Chinese listed firms

This paper contributes to the upper-echelons theory by extending the investigation of how CEO characteristics, namely gender, age, tenure, education attainment, and duality, influence firms’ strategic decisions regarding brand equity investment. We gather 8830 firm-year observations from the Chinese listed firms for the period of 2012 to 2018. We develop several hypotheses and use a probit regression specification to test each hypothesis. The empirical results show that a CEO’s tenure and duality have a positive influence. Interestingly, the CEO’s age has a negative influence while their gender and education have no significant influence on a firm’s propensity to invest in brand equity. It indicates that longer tenures and duality lead CEOs to be confident making them more willing to invest in high-risk projects. It also indicates that older CEO’s are risk-averse, while gender does not play a role in the risk-taking appetite of the CEO. The results provide several implications for firms looking to develop influential brands, especially in China.