CEO Influence Research Articles

Narrowing the eco-innovation gender divide: insights for transition economies

ABSTRACT This paper aims to address the gender imbalance in eco-innovation within firms, particularly focusing on the role of top managers. Drawing on Upper Echelon Theory and Social Identity Theory, the study investigates the influence of female CEOs on the promotion of eco-innovation and examines how knowledge factors influence this relationship, especially within transition countries. Using a comprehensive cross-sectional dataset from the World Bank and EBRD (BEEPS), the research analyses over 12,000 firms operating across 28 European and Central Asian transition economies. The findings show that firms led by a female CEO are less likely to engage in eco-innovation. However, the moderating effect of knowledge can complement CEO actions, though this effect varies by macro-area. The study suggests tailored strategies, emphasising the need for knowledge-sharing networks, targeted investments in human capital, and a collaborative organizational culture. These strategies represent concrete steps to enhance management capabilities and mitigating the costs and uncertainties associated with eco-innovation process in specific socio-economic contexts

Can military-experienced CEOs improve corporate outcomes?

Purpose This paper aims to assess the role of CEOs with military experience in shaping corporate outcomes in Vietnam and provide new insights into how these unique backgrounds influence corporate financial decisions and firm performance within the specific context of an emerging market. Design/methodology/approach This study uses a comprehensive data set of 323 non-financial firms listed in Vietnam over 2013–2021 to examine the association between military-experienced CEOs and corporate outcomes. The authors apply propensity-score matching analysis to address potential endogeneity issues and use 2SLS estimation to show the mechanisms through which military CEOs affect firm performance. Findings The authors find that firms led by CEOs with military backgrounds outperform their counterparts lacking this experience. Furthermore, the findings indicate that firms helmed by military-experienced CEOs tend to make more investments and maintain lower (higher) short-term (long-term) debt levels. Practical implications This study provides additional evidence on the influence of military CEOs on corporate outcomes, particularly in the context of an emerging market. It underscores the positive effects of skills acquired during military service on veterans’ civilian careers, particularly in business leadership roles. The findings are valuable for managers contemplating the recruitment of veterans, highlighting the potential advantages these individuals can bring to a company. Additionally, the results may inspire younger individuals to consider military training as a means to develop valuable characteristics that can enhance their personal and professional development. Originality/value The authors have observed the notable success in firms led by CEOs with military backgrounds since Vietnam’s renovation period in the 1980s. Yet, to the best of the authors’ knowledge, research on the influence of military-experienced CEOs in Vietnam remains scarce. This study is the first pioneering in shedding light on the diverse contributions of soldiers to the development of the Vietnamese economy.

CEO power and risk taking: evidence from European banks mergers and acquisitions

PurposeThis study investigates the relationship between CEO power and the risk profile (RP) of acquiring banks through mergers and acquisitions (M&A) transactions.Design/methodology/approachThe analysis is based on 214 transactions between 2010 and 2022 involving European Union-based acquirers. To assess the impact of M&A on the acquiring bank’s RP, we compare changes in the acquirer’s RP to control banks. We use linear regression with two-stage least squares instrumental variables (2SLS-IV) to examine the effect of CEO power on changes in merger-related risk.FindingsThe findings suggest that CEO power reduces the RP of the acquiring bank. Specifically, CEOs who hold both the CEO and board chair positions tend to take fewer risks. Additionally, CEOs with high ownership, CEO pay and extensive experience (measured by tenure and acquisition experience) decrease the RP. However, prestige power is positively correlated with an increase in RPs.Practical implicationsThis research examines CEO influence on bank risk post-mergers, providing insights into governance, risk and strategic choices. The findings can guide banks in CEO selection and governance to mitigate M&A risks, improving risk management and decision-making in the financial sector.Originality/valueThis study is the first empirical investigation introducing diverse executive power metrics to analyze the link between executive power and risk-taking in the European banking sector, with a specific emphasis on the impact on M&A as critical investment choices.

How Do Elite-Educated CEOs Choose the M&A Payment Method? Evidence from Taiwan

This paper examines the influence of CEOs with elite educations on the selection of payment methods in mergers and acquisitions (M&A). Analyzing a unique hand-collected dataset of M&A announcements involving Taiwanese acquirers during 2007–2020, we find that acquirers led by elite-educated CEOs are more likely to opt for cash financing in M&A transactions, a preference that persists even after conducting robustness tests and addressing endogeneity bias. Elite-educated CEOs with a Ph.D. or Master's degree in management- or finance-related disciplines are further found to exhibit a marked preference for cash payments, particularly when their firms face greater financial constraints. These observations can be attributed to potentially lower costs of external funding and might also reflect a perception among these CEOs that their firms are undervalued, as posited by both the financing proficiency hypothesis and the overconfidence trait hypothesis. By dissecting distinct implications of these two hypotheses for M&A valuation, we finally examine and show that acquirers led by elite-educated CEOs, particularly those choosing cash for M&A financing, experience superior post-M&A stock returns and operational performance. Our conclusion thus suggests that the financial acumen derived from elite education, rather than overconfidence, predominantly influences M&A payment methods and favorably impacts subsequent valuation outcomes. Overall, this study represents a pioneering effort to shed light on the often-overlooked role of top executives' elite educational backgrounds in strategic decision-making within the context of M&A.

The impact of the CEO’s Islamic religiosity on tax aggressive behavior in family firms

Purpose The authors investigate the influence of CEOs’ Islamic religiosity on the level of tax aggressiveness within private family firms. In addition, this study aims to explore the moderating role of the CEO's ownership stake in the firm and the payment of Zakat. Design/methodology/approach The authors gathered data through surveys completed by 199 CEOs of Jordanian Islamic family firms. These survey results, along with financial statements, were used for multiple ordinary least squares regression analyses. Findings The results of this study reveal a negative relation between the extent of Islamic religiosity of the CEO and the level of tax aggressive behavior. Furthermore, the results suggest that an increase in the CEO’s ownership stake strengthens the negative association between the CEO’s religiosity and the extent of tax aggressive behavior. Finally, the CEO’s involvement in Zakat payments is shown to mitigate the negative association between the CEO’s religiosity and the extent of tax aggressive behavior. Originality/value In contrast to prior research that examines the relationship between religiosity and tax aggressiveness within the context of other religions, particularly Christianity, in listed firms, and primarily considers the religiosity of the overall firm environment, the study centers on the CEO’s religiosity in private Islamic family firms. The Islamic context further enables us to investigate whether the fulfillment of Zakat diminishes the moral obligation experienced by religious CEOs to fulfill their tax responsibilities.

Do CEO overconfidence and demographic characteristics moderate the effect of R&D investment on firm performance?

PurposeThis paper aims to examine the influence of overconfident or conservative CEOs on the performance feedback of R&D investment, as well as the combined impact of CEO overconfidence and demographic characteristics on the relationship between performance feedback of R&D investments.Design/methodology/approachGrounded in the upper echelon theory, listed companies in China are selected as samples, and the Heckman two-stage model is used to examine all the models.FindingsThis paper reveals that overconfident CEOs tend to make suboptimal investment decisions. These decisions are influenced by cognitive biases that have a negative impact on the performance of R&D investments. However, the negatively moderating effects of CEO overconfidence can be mitigated if they have overseas experience or academic background, or they are younger.Originality/valueThese mechanisms highlight the various ways in which CEO psychological factors and demographic characteristics can complement each other.

Greening the path to disruptive innovation: The roles of CEOs characteristics, green organizational identity, and green product competitiveness

AbstractThis study explores the link between sustainability orientation and disruptive innovation in small and medium‐sized enterprises (SMEs) by embracing both the natural resource‐based view (NRBV) and upper echelons theory. By drawing on these theories and extending them, it sheds light on the executives' characteristics and organizational contingencies leading to disruptive innovation. Starting from the CEOs' sustainability orientation, it investigates if and how it leads to disruptive innovation through the mediating role of green organizational identity and the moderating influence of both green product competitiveness and CEOs' gender‐related characteristics. Two wave time‐lagged survey data from 257 Chinese SMEs are analyzed to empirically test these relationships. Results suggest that SMEs with CEOs characterized by sustainability focus foster a green organizational identity, enabling them to generate disruptive innovations. Additionally, the presence of high green product competitiveness strengthens the connection between sustainability orientation and green organizational identity. Lastly, the relationship between this latter and disruptive innovation can be further enhanced by female CEOs by leveraging their specific skills and abilities. Implications for managers, organizations, and public policy are discussed.

Do firms led by founders take higher risk?

AbstractThis study examines whether firms led by founder‐CEOs are significantly different from firms led by nonfounder‐CEOs in terms of the nature of their risk. Our results show that founder‐led firms are associated with higher operational but lower financial risk. We find that the differential nature of risk‐taking in founder‐CEO firms is driven by CEO's influence, their propensity of removal, and the probability of bankruptcy of the firm. While CEO‐chair duality and the sensitivity of founder‐CEO firm's probable bankruptcy play significant roles in determining the level of financial risk, the sensitivity of founder‐CEOs to forced turnover leads to higher operational risk.

Motivated to be socially responsible? CEO regulatory focus, firm performance, and corporate social responsibility

This study examines the interactive effect of CEOs’ regulatory focus and corporate financial performance (CFP) on the firm’s corporate social responsibility (CSR). While prior research has examined the influence of CEOs’ psychological attributes on CSR, less attention has been devoted to understanding how the firms’ CFP impacts this relationship. Drawing on regulatory focus theory and the behavioral theory of the firm, we integrate these CEO-level and organizational-level mechanisms into an overarching theoretical framework that explains when and how CEOs are motivated to engage in CSR. We propose that promotion-focused (prevention-focused) CEOs will engage in CSR when CFP is above (below) aspirations but disengage from CSR when CFP is below (above) aspirations. We find partial support for these hypotheses using a sample of 1,250 U.S. firms.

CEO foreign experience and corporate environmental, social, and governance (ESG) performance

AbstractThis research examines the impact of the Chinese CEOs with foreign experience from developed nations on the firm's environmental, social, and governance (ESG) performance, drawing on imprinting theory, stakeholder theory, and resource dependence theory. Using manually collected data of CEOs' foreign experience and corporate ESG data from the Bloomberg database for Chinese listed firms from 2011 to 2020, we observe that CEOs with foreign imprinting tend to improve their corporate ESG performance in China. The positive relationship between CEO foreign experience and corporate ESG performance is more significant when the CEO is female, when the CEO is more educated, and when the firm is state‐owned. To better understand the underlying influence, our study indicates that the influence of CEOs' foreign experiences on corporate ESG performance is primarily manifested in the advancement of corporate social and environmental responsibility. Section 4.3 reveals that experiences obtained from developed economies have a more pronounced impact on promoting firms' ESG performance compared to experiences gained in underdeveloped countries. This empirical evidence underscores the significance of foreign experiences gained in developed economies in driving firms' ESG performance. Overall, our research makes a contribution to the study of CEOs' foreign exposure and corporate ESG performance.

Founder's birth order and triple bottom line in B2B SMEs

Leveraging upper-echelon and post-traumatic childhood experience theories, this study analyses the influence of CEOs' birth order in the family on firms' triple bottom line management. Conducting our study in the B2B market and SME context during the COVID-19 pandemic, we assert that the eldest sibling tends to adopt more prosocial behavior than younger siblings. When first-born individuals become entrepreneurs, their values get reflected in the firm's organizational culture and the strategic choices they make as CEOs. We further suggest a mediating mechanism of a sustainable marketing orientation for sibling birth order and triple bottom line management and a moderating role of CEO childhood trauma experience. Childhood trauma experience moderates the mediating effect of sustainable marketing orientation, i.e., a moderated mediating mechanism. Heeding calls for research in marketing to become more interdisciplinary, we leverage the family science and upper echelon theories to expand the B2B marketing literature.

Is Green the Virtue of Humility? The Influence of Humble CEOs on Corporate Green Innovation in China

Facing severe environmental degradation around the world, green innovation is considered as an effective way to achieve sustainable competitive advantages. How to motivate firms to engage in green innovation is becoming increasingly important for both the practice and academics. Grounded in upper echelons theory, this study establishes a link between humble CEOs and corporate green innovation. The developed theoretical framework argues that CEO humility, an important but unexplored virtue and psychological trait, has positive effects on green innovation. Furthermore, we also propose that green business strategy mediates this relationship and the successful integration of marketing and technology could strengthen strategy implementation and make being green worthwhile. Supportive evidence is found for these ideas with empirical results based on a moderated mediation analysis of a sample of Chinese manufacturing firms. These findings extend the understanding of the importance of CEO characteristics for firm-level strategies and green achievements.

Are female CEOs greener? Female CEOs and green innovation: The role of their political embeddedness

AbstractAre female CEOs greener? Few studies have explicitly scrutinised the roles of female CEOs and their political embeddedness in green innovation. In the present work, the influence of female CEOs on green innovation is first examined. Then, the effect of politically embedded female CEOs on green innovation is explored by differentiating female CEOs as those who are and who are not politically embedded, respectively. Furthermore, the moderating effects of external environmental factors on this relationship, namely market competition and market development, are investigated. Using data on China's publicly operated firms from 2008 to 2017, the findings suggest the following: (1) female CEOs negatively affect green innovation; (2) politically embedded female CEOs positively affect green innovation; (3) the positive influence of politically embedded female CEOs on green innovation is strengthened when firms are situated in less competitive industries and more developed markets. This article extends the research and current knowledge base about female CEOs, political embeddedness, and green innovation.

Pengaruh Kepemilikan Manajerial, Women CEO dan Water Accounting Terhadap Manajemen Laba

The purpose of this study is to determine the influence of managerial ownership, women ceo and water accounting on profit management in Manufacturing Companies listed on the IDX in 2019-2021. This study used quantitative proximity. The population in this study is Manufacturing Companies on the Indonesia Stock Exchange in 2019-2021, which is 787 companies. The sampling technique used was purposive sampling and a sample of 21 companies was obtained. The data analysis technique used is panel data regression with Eviews software version 9. The results showed that there is no effect of managerial ownership on profit management. There is an influence of women CEOs on profit management. There is an effect of water accounting on profit management.

The power of CEO growing up in poverty: Enabling better corporate environmental, social, and governance (ESG) performance

AbstractRecently, environmental, social, and governance (ESG) has been the subject of extensive research and publication. Researchers have pointed out that corporate ESG performance is not only determined by the demographic and personality characteristics of current executives, but also by early‐life experiences. Recent research has illuminated the influence that early‐life experiences of executives have on corporate social performance. However, there is still a lack of research on how executive poverty experiences affects corporate ESG performance. To fill this void, our study investigates the potential influence of CEOs' childhood poverty experiences on corporate ESG performance, employing the upper echelon theory and imprinting theory. Specifically, we gathered data for publicly traded Chinese companies from 2011 to 2020, and discovered that companies helmed by CEOs who grew up in underprivileged neighborhoods demonstrated superior ESG performance. We also scrutinized the moderating mechanisms that impacted the strength and attenuation of poverty imprinting. Our findings reveal that CEO expected tenure and green investors augment the favorable impact of poverty imprinting on corporate ESG performance, while CEOs who receive higher compensation exhibit a weaker imprint. Our study contributes significantly to the imprinting field and the literature on corporate ESG performance, while also providing valuable insights into strategies that facilitate pro‐social conduct among firms.

CEOs' knowledge integration， entrepreneurship, and corporate innovation: Evidence for China

This study examines the influence of CEOs' knowledge integration on corporate innovation. We find that CEOs with an initial natural science background are more innovative and bring about greater corporate innovation. Academic and social knowledge integration effects show that CEOs with an initial natural science background who engage deeply in a certain discipline, enterprise, or industry are more innovative and bring more corporate innovation. Furthermore, free and open innovation environments help integrate CEOs' knowledge and improve corporate innovation. We show that dynamic knowledge integration can facilitate entrepreneurship and corporate innovation.

The effect of CEOs’ being the only children in the family on their CSR engagement

Purpose This study aims to investigate the influence of CEO’s only-child status on corporate social responsibility (CSR) practices. It seeks to extend the understanding of upper echelon theory by examining unexplored CEO characteristics and their impact on CSR decisions. Design/methodology/approach The paper uses manually collected CEO family information and Chinese Stock and Market Accounting Research data as a basis to examine the influence of CEOs’ early-life experiences on their engagement in CSR activities. The study applies attachment security theory from developmental psychology and uses upper echelon theory, particularly focusing on CEOs’ only-child status. A comparative analysis of philanthropic donations between CEOs who are only children and those who have siblings is conducted. The study also examines the moderating effects of corporate slack resources and CEO shareholdings. Findings Preliminary findings suggest that CEOs who are only children are more likely to engage in CSR compared to their counterparts with siblings. However, the difference in donation amounts between the two groups tends to attenuate with decreased slack resources and increased CEO shareholdings. Originality/value To the best of the authors’ knowledge, this research represents the first attempt to investigate being the only child in one’s family and the CSR-related decision of CEOs, which extends the upper echelon theory by introducing the family science theory into the management domain.

CEO's poverty imprints and corporate financial fraud: Evidence from China

Our research examines the potential influence of CEOs' childhood poverty experiences on corporate financial fraud. We employ upper echelon theory and imprinting theory to investigate how CEOs' childhood poverty imprint affects corporate financial fraud. Using data for Chinese publicly traded firms from 2011 to 2020, we discover that corporations with CEOs who experienced childhood poverty had a higher likelihood of engaging in financial fraud. Following the fraud triangle theory, we investigate moderating mechanisms affecting decay and the strength of poverty imprinting. Our findings suggest that CEOs' companies with poor performance reflect a weaker imprint, but CEO age and board independence diminish the positive impact of poverty imprinting on corporate financial fraud. The contributions of imprinting, the fraud triangle theory, and the literature on corporate financial fraud are also discussed.

The role of founder CEO and independent board in family firms' international growth: evidence from India and Italy

PurposeThis paper investigates the role of the founder CEO and board independence in shaping the way in which Indian and Italian family firms (FFs) pursue international growth via two modes, that is exports and FDI. This article claims that country's context matters in determining the relationship between the presence of the founder CEO and FFs' extent of exports and extent of FDI. Further, this article examines the moderating role of board independence on the above-mentioned founder CEO–FF's international growth relationship.Design/methodology/approachUsing a fixed-effect panel data method, this article tests the hypotheses on a sample of 1,275 Indian FF-year observations and 705 Italian FF-year observations over the period 2008–2015.FindingsThis article reveals that the presence of a founder CEO is positively associated with the extent of exports but negatively associated with the extent of FDI in Italian firms. However, in case of Indian firms, the presence of the founder CEO is negatively associated with the extent of exports as well as with the extent of FDI. This founder CEO's influence on the firm's international growth is mitigated by the presence of an independent board in Italian firms; however, this moderation is not significant in the case of Indian firms.Research limitations/implicationsIt is important to capture heterogeneity within family firms and across institutional contexts while studying family firms' international growth. Further, it is important for international business scholars to theorize for different modes of international growth because challenges faced in expansion via exports are different from the challenges faced in expansion via FDI (foreign subsidiaries). Therefore, family firms leadership might prefer a certain mode of international growth.Practical implicationsThe findings of the study imply that national culture and institutional context could play an important role in determining (a) Founder CEO's inclination towards FF's extent of exports and FDI as well as (b) the effectiveness of an independent board in mitigating founder CEO's influence on FF's international growth.Originality/valueThis work is one of the very few studies that examines the impact of FF's heterogeneity and country heterogeneity on two modes of international growth, namely exports and FDI, in the Indian and Italian contexts. Further, this work provides empirical evidence on the independent board's role in mitigating founder CEO's influence in decision making in the case of Italian firms. Extant literature expects an independent board to encourage FFs' international growth both via exports and FDI; this study shows that independent boards could reduce the founder CEO's inclination towards exports and mitigate founder CEO's influence on the decision making; however, this mitigation effect is highly context dependent.

Advancing New Strategic Initiatives: The CEO and Middle Management Social Influence Process

Advancing New Strategic Initiatives: The CEO and Middle Management Social Influence Process