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CEO Experience and Enterprise Environment, Social and Governance Performance: Evidence from China

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  • Shuairan Sang

    (Business School, Shandong University of Technology, Zibo 255000, China)

  • Aiguo Yan

    (Business School, Shandong University of Technology, Zibo 255000, China)

  • Mahmood Ahmad

    (Business School, Shandong University of Technology, Zibo 255000, China
    MEU Research Unit, Middle East University, Amman 11813, Jordan
    School of Economics and Business, Western Caspian University, Baku AZ1001, Azerbaijan)

Abstract

Practicing ESG concepts is considered a viable way to achieve sustainable development for enterprises and is an important contributor to realizing high-quality economic development. This paper builds on the upper echelons theory, which posits that a company’s strategic decisions are influenced by the cognitive perceptions and values of its CEO. Based on the data of Chinese A-share listed companies from 2009 to 2021, this paper empirically examines the impact of CEOs’ green, academic, and political experiences on corporate ESG performance through multiple regression analysis. This study found that CEO experience has a significant impact on corporate ESG performance: rich green, academic, and political experience promotes corporate ESG performance. A stepwise regression test found that CEO experience drives corporate ESG performance by improving corporate green innovation and alleviating financing constraints. Further analysis showed that the contribution of CEO experience to ESG performance is more pronounced for firms with younger CEOs, non-state-owned enterprises, and high-polluting industries, although CEO gender is insignificant. The findings of this study provide important policy implications to improve ESG responsibility.

Suggested Citation

  • Shuairan Sang & Aiguo Yan & Mahmood Ahmad, 2024. "CEO Experience and Enterprise Environment, Social and Governance Performance: Evidence from China," Sustainability, MDPI, vol. 16(11), pages 1-20, May.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:11:p:4403-:d:1399978
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