Top Management Team Characteristics Research Articles

Industry and Regional Peer Effects in Corporate Digital Transformation: The Moderating Effects of TMT Characteristics

Currently, the research on corporate digital transformation is mainly explored from the perspective of independent decision-making, but pays less attention to the interactive impact among peer firms. Taking the listed equipment manufacturing enterprises in China as its research sample, this paper uses theoretical analysis and empirical tests to test the impact of peer effect in corporate digital transformation and the moderating effect of top management team (TMT) characteristics. The results show that there are industry peer effects and regional peer effects in corporate digital transformation in which TMT characteristics play a moderating effect. Furthermore, the higher the proportion of females, the younger the average age, the higher the average education, and the longer the average tenure in TMT, the more significant the positive impact of industry peer effect and regional peer effect in corporate digital transformation. The above conclusions remain valid when using change variables, Tobit tests, lag period tests, and IV methods for robustness tests. Further analysis of the results shows that there is a non-linear impact between digital transformation and green technological innovation, and there are multiple mediating effects among industry and regional peer effects, digital transformation, R&D, and green technological innovation. In addition, it is necessary to further examine the social network peer effect in corporate digital transformation as well as the mechanism and economic consequences of peer effect in the future. These findings contribute to a more comprehensive understanding of the driving factors that affect the digital transformation of equipment manufacturing enterprises in China and provide new evidence and theoretical contributions for enterprises to enhance the efficiency of digital transformation and strengthen the construction of a TMT.

Top management team characteristics, technological innovation and firm's greenwashing: Evidence from China's heavy-polluting industries

Greenwashing has become an important strategy for firms to cope with the huge pressure brought by environmental sustainability and win environmental legitimacy. Based on the upper echelon theory and legitimacy theory, this study uses the grounded theory research method to develop the scale of firm's degree of greenwashing specialized with Chinese characteristics, and empirically tests the relationships among top management team (TMT) characteristics, technological innovation, and firm's greenwashing. The results show that TMT education level has a significantly negative effect on firm's greenwashing, while TMT functional background diversity has a significantly positive effect on firm's greenwashing. Technological innovation has a significantly negative impact on firm's greenwashing, and significantly moderates the relationships between TMT age and firm's greenwashing and between TMT functional background diversity and firm's greenwashing, respectively. Our findings provide references for managers and policy makers to understand the influence of TMT characteristics on firm's greenwashing as well as the effective weakening effect of technological innovation on firm's greenwashing.

Supplier transaction, TMT characteristics, and the persistence of earnings: do their relationship contribute towards sustainable performance of Chinese listed manufacturing sector firms?

The construction of supplier transaction is one of the strategic choices of many firms. However, the impact of business strategies on the persistence of earnings remains to be further investigated. The innovation of this paper lies in interpreting the impact of supplier transaction on earnings persistence from the perspective of characteristics of the top management team (TMT). We consider Chinese listed manufacturing firms from 2012 to 2019 to examine the relationship between the supplier transaction and the persistence of earnings. Statistical results show that supplier transaction characteristics of the TMT have a significant moderating effect on the relationship between the supplier transaction and the persistence of earnings. This implies that the behavior of TMT can be vital to the firm in maintaining sustainable performance. The higher age level or longer average tenure of TMT can significantly improve the positive effect of the supplier transaction tenure heterogeneity of TMT that will significantly improve the negative effect. This paper expands the literature on supplier relationship, and corporate earnings from a new perspective that improves the empirical evidence of the upper echelons theory, and also provides evidence support for the construction of supplier relationship and TMT.

The Impact of Top Management Team Characteristics on the Risk Taking of Chinese Private Construction Enterprises

Private construction businesses have grown quickly, greatly boosting China’s economic growth; nonetheless, these businesses suffer tremendous developmental uncertainty, particularly when compared to larger state-owned businesses. The traits of the top management team (TMT) may have a direct impact on how risk-taking and decision-making behaviors are exhibited by businesses, according to earlier studies. The majority of private construction companies in China are family businesses with family members making up the majority of their top executives. As a result, these companies are vulnerable to family centralization, which will definitely boost their risk-taking level. This study used a sample of private listed companies in China’s construction industry from 2009 to 2019 to explore the impact of CEO traits on the risk-taking degree of enterprises. The findings show that a higher percentage of top female managers and a higher average rate of TMT member both lower the level of risk taking in private construction businesses. The level of risk taking, however, is positively impacted by the top management’s higher average education level. The average tenure and overseas experience of TMTs and the degree of risk taking in private construction enterprises are not significantly correlated. Additionally, the degree of risk taking in private construction firms can vary depending on the qualities of the senior management team.

RESEARCH ON THE RELATIONSHIP BETWEEN THE CHARACTERISTICS OF TMT, FINANCING CONSTRAINTS AND ENTERPRISE INNOVATION--BASED ON THE DATA OF CHINESE LISTED COMPANIES

The paper, taking the relevant data of Chinese A-share listed companies in both Shanghai and Shenzhen stock exchanges from 2007 to 2019 as the research samples and searching annual reports, CSMAR database and WIND database as data sources manually, attaches importance to study the relationship between the characteristics of top management team (TMT), financing constraints and enterprise innovation so as to structure the framework model of these three elements and further verify the relationship among them. The specific study goes to make educational level, tenure, age and gender as proxy variables to measure TMT characteristics, and financing constraints as moderator variables to study the moderating effect of the relation between TMT characteristics and enterprise innovation. Further, the paper also draws the conclusion about how financing constraints regulate the influence of various dimensions of TMT characteristics on enterprise innovation. What is the most innovative part in this paper is to bring the financing constraints as moderator variables to study its impact on TMT characteristics as well as enterprise innovation.

Regional culture: The role of the invisible hand in shaping local family firms' top management team.

Research on family businesses has focused on the differences between family and non-family firms regarding the top management team (TMT), while this study further explores the difference within family firms from different regional culture based on the perspective of socio-emotional wealth (SEW) and evolutionary psychology. Using a sample comprised of all 625 family firms listed on the Small & Medium Enterprise Board and Growth Enterprise Board in Shenzhen Stock Exchange, this study finds that in regions of strong clan culture, family members are more willing to be involved in a family business and accept lower economic rewards. Particularly, when financial risk is high, these relationships mentioned above become more significant. Based on the results, this study proves that regional culture can affect the characteristics of top management teams in family firms, explains the heterogeneity of family firms' decision-making from a culture-based perspective and extends existing research on family business from the level of "family firm vs. non-family firm" to that of "family firms affected by different regional cultures".

Nexus between environmental disclosures and top management team characteristics: a systematic review.

Voluntary nature of sustainability disclosures in most of the countries shifts focus of academicians towards discretion of top executives as a major determining force for firms to make their operations environmentally and socially sustainable. Based on two decade literature on the topic available at Scopus database this study aims to present a comprehensive knowledge map of intellectual structure on the relationship of top management characteristics on sustainability spending and disclosures. A bibliometric systematic review of 164 articles from 2002 to 2022 has been conducted with the help of VOSviewer and identified most influential journals, articles, and the countries whose corresponding authors have contributed in the field and influential research clusters in the literature. These research clusters are first, red cluster with 94 articles has discussed the upper echelon's personal and professional characteristics in relation to sustainability disclosures. Second, green cluster with 60 articles has discussed particularly the gender diversity in top executives and board of directors in relationship with sustainability disclosures. Third, blue cluster with 10 articles has elaborated the influence of independent directors on sustainability disclosures of corporate sector. The findings of this study will particularly help the regulators to make regulations regarding critical mass of female on boards and top management, family-owned firms, and politically connected directors. Moreover it will also help consultants, analysts, and investment bankers to differentiate firms with pressure-resistant and pressure-sensitive institutional investors. From this review shareholders can be very much clear in the selection of their representatives and ultimately the appointment of top management team. This study also provides an insight for future direction so that unexplored dimension of this field may further be discovered by upcoming researchers.

TMT Heterogeneity in Breakthrough Innovation: The Role of Strategic Decision-making Logics

Breakthrough innovation can create new technological trajectories, new markets and even change the competitive landscape, which serves as the driving force of firms’ competitive advantages. Based on Upper Echelons Theory, we focus on how TMT heterogeneity affects breakthrough innovations, and examine how strategic decision-making logics (causation & effectuation) adopted by members of top management teams moderate the relationship between the TMT heterogeneity and breakthrough innovation. By using a sample consists of 227 respondents from China, we use linear hierarchical regression analysis to test the hypotheses on the TMT heterogeneity-innovation relationship. Our findings show that TMT heterogeneity has a positive impact on breakthrough innovation. Both causation and effectuation positively moderate the positive relationship between TMT heterogeneity and breakthrough innovation. In addition, compared with causation, effectuation has a stronger moderating effect on the relationship between TMT heterogeneity and breakthrough innovation. We follow and extend the interpretive logic of strategic decision-making underlined by Upper Echelons Theory in explaining the relationship between characteristics of top management teams and organizational outcomes. Combining perspectives of information processing and core competence, our work mainly reveals the relationship between TMT heterogeneity and innovation, and explore the contingency effect of decision-making logics (causation & effectuation) in that relationship. Our research conclusions help TMTs deeply understand the generation as well as its mechanism of breakthrough innovation, and provide new perspectives and guidelines for them to carry out breakthrough innovation as well.

Top Management Team Characteristics, Overconfidence, and Financial Asset Allocation

Top Management Team Characteristics, Overconfidence, and Financial Asset Allocation

Diversity in Top Management Teams

Over the past decade, diversity in organizations has become a central theme of management practice and research. Given the importance of the top management team (TMT) for firms, management scholars have increasingly examined the role of diversity for TMTs by shedding light on its antecedents, contingencies, and consequences. These endeavors have led to a meander of studies published in academic journals. As diversity grows and becomes ever more important in all parts of an organization, it is important to take stock of current research and navigate the meander to identify current conceptual gaps and pave theoretical pathways forward. In this study, we combine a literature review with a machine learning approach, i.e., topic modeling, to structure the research landscape of diversity in TMTs. For our topic modeling, we analyzed the text of 1,454 articles published in peer-review journals between the years 2010 and 2021. Our findings provide an overview of the research landscape of diversity in TMTs and its 19 topics, and carve out four communities of topics – i.e., (1) TMT characteristics, (2) TMT responsibilities, (3) dimensions of diversity, and (4) quantitative empirical research. By combining a qualitative and a quantitative literature review, this study contributes to the literature about diversity in TMTs by identifying current research streams and underrepresented topics, and providing directions for future research.

Entrepreneurial Passion and Entrepreneurial Orientation: The Role of Regulatory Focus

An emerging body of literature seeks to shed light into the underlying mechanisms through which the psychological characteristics of CEOs, entrepreneurs, and top management teams affect organization-level outcomes. This so-called black box of upper echelons theory is central to our shared understanding of how and why organizational strategy is influenced by individual-level characteristics. To reveal deeper insights into such cross-level relationships, we investigate how an important characteristic – entrepreneurial passion – influences firms’ strategic postures, specifically entrepreneurial orientation (EO). We invoke regulatory focus theory to explain the mechanism by which the intensely positive emotions associated with passion transmute into the innovative, proactive, and risk-seeking strategies that characterize firm-level EO. We consider both promotion and prevention foci to explain their differential impact on the passion-EO relationship. Moreover, we also explore how the contextual role of environmental dynamism influences the relationship between regulatory focus and EO. Thus, we contribute not only to the extant bodies of literature on entrepreneurial passion and EO but also to ongoing efforts to open the black box of upper echelons theory.

Motivated to Fight Climate Change? How TMT Regulatory Focus Shapes Green Innovation in Family Firms

Facing trends of environmental regulations and environmental consciousness, firms need to engage in green innovation. Particularly important for family firms, green innovation helps firms to achieve sustainable competitive advantage, fostering long-term firm survival. Yet, we still lack theoretical evidence on how motivational characteristics of the top management team (TMT) (i.e., regulatory focus) relate to green innovation. Drawing on upper echelons and regulatory focus theory, we examine the relationship between TMT regulatory focus and green innovation. We further posit that family involvement and technological turbulence moderate this relationship. Analyzing a longitudinal panel dataset with 910 firm-year observations of 116 S&P 500 family firms between 2005 and 2018, we find that TMT promotion and prevention focus are positively associated with green innovation. Family involvement positively moderates the relationship between TMT promotion focus and green innovation but does not moderate the relationship between TMT prevention focus and green innovation. In addition, technological turbulence positively (negatively) moderates the relationship between TMT promotion (prevention) focus and green innovation. This study expands research on upper echelons and regulatory focus theory by showing that psychological characteristics of TMTs (i.e., regulatory focus) determine firm-level outcomes (i.e., green innovation) in family firms, linking regulatory focus theory to the TMT.

Characteristics of top management team and Chinese tax planning nexus: Findings from a fuzzy-set qualitative comparative analysis.

A top management team (TMT) has been identified as one of the key factors driving changes in tax planning strategy. Based on upper echelons theory, this study investigates whether configurations of TMT characteristics influence enterprise tax planning strategy by using the fuzzy-set qualitative comparative analysis (fsQCA). Using a panel data of China public companies, we found three configurations conducive to aggressive tax planning and two combinations conducive to low tax planning. Specifically, the level of education, tenure, age, career experience, and size of the top management team affect a firm’s propensity to engage in tax planning. Further, the results show that top management teams are not alike and highlight the differences in how these characteristics combine to impact tax planning.

Behavior decision of top management team and enterprise green technology innovation

The behavioral decision-making characteristics of top management team (TMT) are the most direct factors affecting enterprise decision-making and team management style. Using the panel data of A-share listed manufacturing companies scanning from 2010 to 2019, this paper empirically tests the relationships between the four irrational variables of TMT and green technology innovation (GTI). The results show that: ① On the whole, social responsibility, innovation spirit and risk-taking spirit are significantly positively correlated with GTI, environmental protection consciousness is significantly negatively correlated with GTI, and the compound effect of the four subjective variables also shows these relationships. ② Heterogeneity analysis shows that the effect of TMT irrational characteristics is different in different types of enterprises. In large-scale enterprises and state-owned enterprises, the regression results are basically consistent with the full sample; in small-scale enterprises and non-state-owned enterprises, risk-taking spirit is still a significant force affecting enterprise GTI, while other irrational variables are no longer significant. ③ Further research shows that the unabsorbed slack resources of enterprises and marketization level can adjust the relationships between the irrational characteristics of TMT and GTI. On the whole, the role of irrational variables is more obvious when reducing the unabsorbed slack resources; the higher the level of marketization, the more the spirit of adventure can stimulate innovation; increasing enterprise R&D investment can significantly promote the improvement of GTI. The research results provide important reference for the formulation and implementation of GTI strategy.

Reporting on sustainable development: Configurational effects of top management team and corporate characteristics on environmental information disclosure

AbstractAlthough widely explored in many studies, how and why combined top management team (TMT) and corporate characteristics affect environmental information disclosures (EID) are still lacking clarity. This study uses both fuzzy‐set qualitative comparative analysis and necessary condition analysis to reconcile the inconclusive results concerning the configurational effects of these characteristics on EID and to validate the robustness. From a sample of listed construction engineering corporates during the 2014–2018 period, the high EID level is associated with several complex configurations that contain the core characteristics such as corporate ownership and size, whereas the low EID level is related to the configurations including TMT salary and corporate profitability. The findings support the four tenets of equifinality, asymmetry, complexity, and causal asymmetry in complexity theory. Our results capture the complex non‐linear effects of TMT and corporate characteristics and shed new light on environmental disclosure management for corporate sustainable development.

Foreign Experienced CEOs’ and Financial Statement Comparability

ABSTRACT This research examines whether the characteristics of top management teams are related to financial statement comparability. Considering the foreign experienced CEOs (FCEOs) in Chinese listed firms from 2005 to 2018, we show that it can increase financial statement comparability. We argue that firms led by FCEOs will enhance information environment and governance mechanisms by minimizing agency issues, consequently generating more comparable financial statements. Through further investigation, we find that the relationship between FCEOs and comparability is stronger when CEOs possess a financial and accounting background and when they have overseas professional experiences. fthe relationship is weaker with the existence of higher economic policy uncertainty. Finally, we identify financial reporting as an important channel that explains the relationship between FCEOs and comparability. Findings remain consistent after numerous robustness checks and supplementary investigations comprising lag of independent variables, generalized method of moment, instrumental variable approach, propensity score matching, and alternative comparability measures. Overall, the findings suggest that CEOs’ foreign experiences are associated with corporate outcomes.

Is Heterogeneity Better? The Impact of Top Management Team Characteristics on Enterprise Innovation Performance.

Although the importance of the top management team’s characteristics has attracted research attention, its influence remains undetermined. This paper considers the influence of top management team characteristics’ heterogeneity on GEM-listed enterprises’ innovation performance. From the perspective of optimizing top management team human capital and improving enterprise innovation performance, this study analyzes 634 GEM-listed enterprises via regression analysis. The results show that the effect of shallow-factor heterogeneity of the top management team on enterprise innovation performance is not significant, but deep-factor heterogeneity has a negative effect. These findings indicate that deep-factor heterogeneity is more important than shallow-factor heterogeneity and is subject to closer attention. If a GEM-listed enterprise wants to set up a strong top management team that contributes to the improvement of enterprise innovation performance, it must examine the consistency of each member’s educational background and extend their tenure as long as possible without considering the gender ratio or age structure of the team.

Burden or Blessing? CEO Early-Life Adversity Experience and Firm Internationalization Performance.

Firm internationalization is a great challenge that needs a strong leader because of the uncertainty involved. Previous research has examined the antecedents of firm internationalization from the perspective of upper echelons theory, including chief executive officer (CEO) or top management team (TMT) characteristics, yet little research has examined the role of CEO early-life adversity experiences. Based on the imprinting theory and upper echelons theory, this study explores the relationship between CEO early-life adversity experience and firm internationalization. Using data from Chinese listed companies during the period 2007–2017, we demonstrate that CEO early-life adversity experiences have a significantly positive effect on firm internationalization; the effect is stronger when the CEO with early-life adversity has a higher level of organization discretion and institutional discretion. The findings are robust to a battery of alternative variable definitions and estimation methods. We contribute to upper echelons theory and the research on internationalization antecedents by showing that CEO early-life adversity has a positive effect on firm internationalization. The findings suggest boards aspiring to expand internationally place weight on candidates’ early-life experiences while selecting and hiring CEOs and confer them managerial discretion to better play their strength after CEO’s appointment decision is made.

CEO Relational Leadership and Product Innovation Performance: The Roles of TMT Behavior and Characteristics.

CEO leadership is considered a critical antecedent of product innovation performance, but the relational aspect of leadership has been largely neglected in this area. Drawing on upper echelons theory and relational leadership literature, this study explores whether, how, and when CEO relational leadership influences product innovation performance. Specifically, we analyze the underlying mechanism of TMT (top management team) voice behavior and two boundary conditions—TMT educational level and TMT age. Based on multi-source and multi-wave data on 105 Chinese firms, this study finds that CEO relational leadership plays an important role in promoting product innovation performance through the intervening mechanism of TMT voice behavior. Furthermore, the positive relationship between CEO relational leadership and TMT voice behavior is stronger in TMTs with higher educational level and lower age. This study contributes to the existing literature by empirically examining the under-investigated relationship between CEO relational leadership and product innovation performance, and by disentangling the underlying mechanism and boundary conditions.

Does top management team’s job mobility experience matter for corporate innovation?

PurposeThis study aims to investigate whether top management team (TMT)’s job mobility experience is related to firm innovation.Design/methodology/approachThe authors use different strategies, including a two-stage instrumental model, difference-in-differences analysis based on TMT members’ sudden deaths, propensity score matching and firm fixed-effects model, to mitigate endogeneity concerns.FindingsThe authors find that firms whose TMT experienced more job mobility have better firm innovation. In addition, the authors reveal that the job mobility experience is positively related to engagement in explorative innovation strategies that generate new knowledge. The findings are robust to a battery of tests to alleviate potential endogeneity concerns. Overall, the results highlight the role of job mobility experience in influencing firm innovation.Originality/valueThis study contributes to the rising literature on the determinants of firm innovation. By showing the TMT’s job mobility experience is related to innovation, the authors expand the literature about the economic consequences of the heterogeneous TMT characteristics. Given that firm innovation is essential to competitive advantage, the results should be of interest to a range of stakeholders, including investors, directors and managers and policymakers.