Face Tells the Truth: How Male Entrepreneur's Facial Masculinity Predicts New Venture Corporate Illegality

Prior research studies how chief executive officers' (CEOs') demographic characteristics, such as gender and age, impact firm unethical behaviors. However, the effect of CEOs' biological traits on corporate illegality is not fully known. Grounded in the approach/inhibition theory of power, this article analyzes whether and how one of male entrepreneurs' most obvious genetically determined biological traits, facial masculinity, predicts the corporate illegality of new ventures. Biological traits are mainly genetically determined. They not only shape an individual's psychological process, but also impact behaviors. Recently, scholars repeatedly call for incorporating entrepreneurs' biological traits into entrepreneurship research. Based on a sample of Chinese firms listed in the growth enterprise market from 2010 to 2016, we identify and quantify male entrepreneurs' facial masculinity with the artificial intelligence facial recognition technology Face++. We find a positive relationship between male entrepreneurs' facial masculinity and new venture corporate illegality. Moreover, we explore the moderating role of individual differences (personal accountability) and social factors (social instability). These factors decrease the likelihood of male entrepreneurs with more facial masculinity to engage in new ventures corporate illegality. Although the facial masculinity of firm leaders may benefit firms by improving firm performance, our results show that there is a need to consider this stably biological trait when predicting unethical behaviors among new ventures.