Can executive green experience improve enterprise total factor productivity? Evidence from China

Enterprise upgrading is the micro-foundation for fostering high-quality economic development. The values and cognitive traits of executives, as the formulators and executors of enterprise upgrading strategies, are internalized into the decision-making process, which in turn affect the behavior and performance of the enterprise. Based on data from A-share listed companies in China from 2009 to 2022, this study examines the impact of executives' green experience on enterprise upgrading, drawing on upper echelons theory and branding theory. Findings indicate that executives' green experience contributes to enterprise total factor productivity (TFP). Moreover, the role of executives' green experience varies: the more power executives have within the team and the more work experience they have with green practices, the greater their effect on promoting TFP. This effect is most evident in non-state-owned and non-heavily polluting enterprises. The conclusions remain valid after conducting the endogeneity and robustness tests. Mechanism test results reveal that executive green experience improves firms' TFP by attracting green investors, thereby strengthening external oversight of environmental governance and by enhancing the efficiency of green innovation. Further studies show that establishing a sustainability committee amplifies the positive impact of executives' green experience on TFP. However, when an enterprise has an excess of redundant resources, this contribution is diminished. This study not only enriches the literature on the governance effect of executives' green experience in terms of high-quality development but also provides valuable insights for regulators seeking to guide and oversee enterprise upgrading.