CEO empathy, corporate policies, and firm value

Abstract

Building on neuroscience studies, this paper proposes an innovative measurement to proxy for CEO empathy based on their emotional mimicry in TV interviews. I then examine how CEO empathy is associated with corporate policies and firm values. I find that CEO empathy is positively related to workplace safety and firm value. The findings suggest that empathetic CEOs are more likely to make corporate decisions that benefit employee welfare and increase firm value.