School of Economics and Management Tsinghua U., China
This study explores the concept of CEO believe in luck and its influence on firm performance, with a focus on sustainability and innovation strategies. While luck is often regarded as a factor in emergent strategies at the individual level, its role within firms has not been thoroughly examined. Using a novel measurement of CEO belief in luck, derived from textual analysis of over 21,000 annual reports from Chinese publicly listed companies between 2010 and 2023, this research investigates the relationship between CEO belief in luck and key corporate outcomes. We identify three sub-level dimensions of CEO belief in luck: karma, external control, and optimism about the future. These beliefs were tested in relation to sustainability and innovation performance, measured by ESG scores and green innovations. The findings suggest that CEOs who believe in luck are more likely to engage in sustainability activities, with both symbolic actions (green talk) and substantive innovations (green walk) showing significant positive correlations with CEO belief in luck. This research contributes to the understanding of how intangible beliefs, such as luck, shape corporate strategy and performance. The results emphasize that CEO belief in luck can enhance long-term sustainability and innovation efforts, with implications for strategic decision-making and leadership behavior in firms.
