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S&P 500 Companies with Foreign-Born CEOs Perform Better

A study conducted by Dr. Anwar Y. Salimi and Ehsan Danesh from the University of La Verne explored the financial performance of companies led by foreign-born CEOs compared to those with U.S.-born CEOs. The researchers focused on 101 companies within the S&P 500 and analyzed data over six years, from 2018 to 2023. Using key performance indicators such as Return on Assets (ROA), Gross Margin Ratio (GMR), and Year-to-Year Net Income Growth, the study found that companies with foreign-born CEOs consistently outperformed those with domestic CEOs.

The research highlights the advantages of diverse leadership, attributing better financial performance to the unique perspectives and innovative approaches brought by foreign-born executives. The findings show that foreign CEOs excelled in managing assets, controlling costs, and driving profitability, even during challenging times like the COVID-19 pandemic. This study underscores the importance of embracing diversity in top leadership roles to enhance organizational success and competitiveness in a globalized business environment.

Anwar Salimi is a professor of accounting in the College of Business. He received his Ph.D. degree in accounting from UCLA.  Ehsan Danesh is a doctoral student in the Doctor of Business Administration program.

“Exploring Financial Performance Disparities: An In-Depth Analysis of Companies Led by Foreign-Born CEOs Versus Non-Foreign-Born CEOs Within the S&P 500” appears in the Journal of Accounting and Finance Vol. 24 No. 2 (2024)  DOI