3 September 2021

Esther Chevrot - Ph.D. Completion

Esther Chevrot-Bianco defends her Ph.D. thesis titled Empirical Essays in Institutional and Organizational Economics.

Time and place: 10 September 2021 at 15:00 in CSS 26.2.21.

Link to attend the PhD defense: https://ucph-ku.zoom.us/j/9536476672

An electronic copy of the thesis can be obtained here: charlotte.jespersen@econ.ku.dk


This Ph.D. dissertation consists of three chapters that constitute independent research articles. Each chapter of the thesis focuses on the interplay between economic outcomes and different social phenomena, namely social networks (chapter 1) and social preferences (chapters 2 and 3). The first chapter highlights the role of social networks for board opportunities in the corporate sector. I find that the main beneficiaries of a board gender quota implemented in Denmark are women with existing family and spousal networks connected to firms' boards. The second chapter examines the role of social preferences in leadership. It shows that CEOs whose leadership style is grounded in strong personal values are more stakeholder-oriented and have a positive effect on firm performance. The third chapter contributes to the debate on the relationship between market participation and moral universalism: the extent to which people exhibit the same level of morality towards strangers and ingroup members. Using a field experiment in Greenland, it adds evidence that market participation correlates positively with moral universalism.

The first chapter highlights the role of family and spousal networks for women's access to the boardroom. It asks how board gender quotas interact with network-based hiring practices and which women benefit from quotas. Using matched firm-directors datasets covering the population of Danish firms and blood- and marriage-based ties as relevant social connections, I show that the introduction of a board gender quota in Denmark in 2012 intensifies network-based hiring, resulting in differential benefits of the law for potential candidates depending on their family connections. First, the quota leads firms to double the share of connected directors among female appointments. Second, potential candidates with family connections to incumbent directors and CEOs become three times more likely to be appointed, whereas the probability to be appointed remains the same for highly qualified but unconnected potential candidates. Taken together, the evidence suggests that sticky norms of hiring based on networks create search frictions in the recruitment of female directors, even in the presence of board gender quotas.

The second chapter (co-authored with Morten Bennedsen) examines the role of values in leadership. The strength of personal values and how these penetrate firm organization is measured through a survey of 1500 Danish CEOs. We construct a measure of value-based leadership and investigate the impact on firm outcomes and firm policies. First, we find that value-based leadership is more common in family firms and with female leadership, but not correlated to leaders' IQ nor to management practices. Second, value-based leadership is positively correlated to firm performance. We provide causal evidence through the analysis of CEO changes and CEO hospitalizations. Third, value-based leaders build more resilient organizations in a pandemic crisis and generate less conflicts, lower employee turnover and have a flatter organizational structure in normal times. Taken together, leaders' personal values and how they spread through organizations are important factors in explaining the value they bring to their firms.

The third chapter (co-authored with Gustav Agneman) contributes to the debate on the relationship between market participation and moral universalism. We study parochial honesty, the tendency to behave more honestly toward members of the ingroup than toward strangers. To this end, we conduct honesty experiments (N=543) in 13 villages across Greenland, where small and geographically isolated communities provide for a natural definition of the ingroup. In order to study group differentiation, we introduce a negative externality in the experiment and randomly vary the identity of the interaction partner. The results reveal significant parochial honesty. Participants inflate payoffs by 11% on average when matched with an outsider, but refrain from misreporting when it negatively affects members of their local community. Furthermore, we find that only participants in the traditional economy exhibit strong parochial honesty; market integrated participants behave equally honest regardless of interaction partner.