CEO characteristics and corporate entrepreneurship in transition economies: Evidence from China

Abstract

Corporate entrepreneurship leads a path to competitive advantages for firms in transition economies such as China. To better understand how corporate entrepreneurship can be developed, we design this study to examine the importance of CEOs' institution-related characteristics, which reflect their human and relational capital, for corporate entrepreneurship in transition economies. Integrating the upper echelons and corporate entrepreneurship literature, this study proposes and tests CEOs' appointment modes, their work experience, and their network ties as antecedents of the level of corporate entrepreneurship in Chinese firms. It also examines whether the effect of CEO characteristics on corporate entrepreneurship tends to be stronger when firm-level and environmental conditions allow the CEOs greater managerial discretion. Results from a survey in 198 Chinese firms indicate that CEOs who are openly recruited and have foreign experiences are more associated with corporate entrepreneurship. Moreover, both the political focus of a CEO's network ties and his/her focus on ties outside the industry more positively relate to CE when he/she has more discretion. Our findings have both theoretical and practical implications, especially to the research on the role of corporate leaders in corporate entrepreneurship and the practices of CEO recruitment and selection.