Abstract
One aspect of entrepreneurship psychology also clarifies individual characteristics. Drawing from entrepreneurship psychology, the concept of a cognitive CEO has been formulated using the DAE statistical technique. The study elucidates that cognitive CEOs not only boost SME performance but also invigorate CSR activity. Data for listed SMEs for the years 2016–2018 are analyzed through the panel regression technique. Significantly, the study demonstrates that CEO age is positively interlinked with the growth and CSR activity of the firm. Moreover, the empirical underpinning of the results also reveals that state-owned enterprises and firms with high total assets prefer cognitive CEOs, who accelerate the firm’s value and invigorate CSR activity. The number of independent directors is analyzed as a moderator and is concluded to be an intensifier for both SME growth and CSR activity. Finally, 2SLS instrumental panel regression is used to validate the veracity of the empirical results.
Highlights
The extant literature signifies that excellent corporate governance influences the performance of firms
Corporate governance among Chinese firms is novel, but its role is vital for sustainability
Entrepreneurship psychology orientates the organizational theorist to contemplate the specific attributes of a CEO that can accelerate a firm’s growth
Summary
The extant literature signifies that excellent corporate governance influences the performance of firms. CEO psychology has been demonstrated via a CEO’s specific attributes, which can affect the firm’s performance asymmetrically (Kim et al, 2016; Ou et al, 2018; Park et al, 2018). CEO attributes affect different aspects of an organization that are interlinked with the firm’s growth and sustainability. In this regard, analyses have been performed on the impact of CEO attributes on a firm’s cash holdings, innovation, corporate social responsibility, and earnings management (Francis et al, 2008; Orens and Reheul, 2013; Chen et al, 2014; Zhang et al, 2017; García-Sánchez and Martínez-Ferrero, 2019)
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