Can “splitting” be beneficial? The impact of top management team information-knowledge faultline on enterprise green transformation

Abstract

Green governance has gradually become an important issue all over the world. Surprisingly, in today’s escalating global environmental problems, we still know little about how the management affects enterprise green and sustainable development. Given this, the core purpose of this article is to analyze whether the reasonable “splitting” of the top management team based on information and knowledge can be considered as a feasible path for enterprises to go green. Based on the upper echelons theory and life cycle theory, this article empirically tests the Chinese listed companies from 2011 to 2020 through a high-dimensional fixed effect model. The results show that top management team information-knowledge faultline significantly promotes green transformation of enterprises. Diversification has a negative moderating effect on the relationship between the two, while industry pollution degree has a positive moderating effect. Another important result is that the top management team information-knowledge faultline in the growing and mature enterprises significantly promotes green transformation. However, this promotion effect does not exist in recession enterprises. This article proves theoretically and empirically that it is effective to promote enterprise green transformation through top management team “splitting” which provides a valuable reference for enterprises and governments determined to improve environmental sustainability.