IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v16y2024i14p6015-d1434979.html
   My bibliography  Save this article

Does CEO Power Affect Manufacturing Firms’ Green Innovation and Organizational Performance? A Mediational Approach

Author

Listed:
  • Qiuyan Yan

    (Business School, Central University of Finance and Economics, Beijing 100081, China)

  • Jing Yan

    (School of Business, Shandong University, Weihai 264209, China)

  • Duo Zhang

    (International Institute of Culture and Education, Northeast Agricultural University, Harbin 150038, China)

  • Shuochen Bi

    (D’Amore-McKim School of Business, Northeastern University, Boston, MA 02115, USA)

  • Ying Tian

    (School of Management, Shandong University, Jinan 250100, China)

  • Riaqa Mubeen

    (School of Management, Harbin Institute of Technology, Harbin 150001, China)

  • Jaffar Abbas

    (School of Media and Communication (SMC), Shanghai Jiao Tong University (SJTU), Shanghai 200240, China)

Abstract

In this research work, we investigate the direct impact of CEO power on corporate performance, as well as the mediating role of green innovation in this hypothesized relationship. In this study, we use observation data collected from 780 listed manufacturing companies, explicitly focusing on the Karachi Stock Exchange (KSE), and adopt a GMM (generalized method of moments) model for testing our hypotheses. The results of this research show that CEO power has a negative impact on sustainable corporate performance, while the mediating role of green innovation positively and completely regulates the effect of CEO power on enterprises’ sustainable performance. This study adds novelty to the literature as it explores the influence of green innovation in manufacturing enterprises on CEO power and firm performance and observes the direct impact of green innovation and CEO power on sustainable business performance. The results of this study show that a green innovation strategy significantly affects CEO power and manufacturing firm performance and that companies that adopt green initiatives can increase corporate value and improve their reputation among stakeholders. The conclusions of this study have important implications for both theory and practice in this field.

Suggested Citation

  • Qiuyan Yan & Jing Yan & Duo Zhang & Shuochen Bi & Ying Tian & Riaqa Mubeen & Jaffar Abbas, 2024. "Does CEO Power Affect Manufacturing Firms’ Green Innovation and Organizational Performance? A Mediational Approach," Sustainability, MDPI, vol. 16(14), pages 1-17, July.
    • Handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:6015-:d:1434979
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/16/14/6015/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/16/14/6015/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Eugene Kang & Asghar Zardkoohi, 2005. "Board Leadership Structure and Firm Performance," Corporate Governance: An International Review, Wiley Blackwell, vol. 13(6), pages 785-799, November.
    2. Die Hu & Lu Qiu & Maoyan She & Yu Wang, 2021. "Sustaining the sustainable development: How do firms turn government green subsidies into financial performance through green innovation?," Business Strategy and the Environment, Wiley Blackwell, vol. 30(5), pages 2271-2292, July.
    3. Hassan, M. Kabir & Houston, Reza & Karim, M.Sydul & Sabit, Ahmed, 2023. "CEO duality and firm performance during the 2020 coronavirus outbreak," The Journal of Economic Asymmetries, Elsevier, vol. 27(C).
    4. Tang, Jianyun, 2017. "CEO duality and firm performance: The moderating roles of other executives and blockholding outside directors," European Management Journal, Elsevier, vol. 35(3), pages 362-372.
    5. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    6. Javed, Muzhar & Wang, Fangjun & Usman, Muhammad & Ali Gull, Ammar & Uz Zaman, Qamar, 2023. "Female CEOs and green innovation," Journal of Business Research, Elsevier, vol. 157(C).
    7. Gan, Dennis & Erikson, Truls, 2022. "Venture governance: CEO duality and new venture performance," Journal of Business Venturing Insights, Elsevier, vol. 17(C).
    8. Canan C. Mutlu & Marc van Essen & Mike W. Peng & Sabrina F. Saleh & Patricio Duran, 2018. "Corporate Governance in China : A Meta-Analysis," Post-Print hal-02312124, HAL.
    9. Faleye, Olubunmi, 2007. "Classified boards, firm value, and managerial entrenchment," Journal of Financial Economics, Elsevier, vol. 83(2), pages 501-529, February.
    10. On Kit Tam & Monica Guo‐Sze Tan, 2007. "Ownership, Governance and Firm Performance in Malaysia," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(2), pages 208-222, March.
    11. Brian K. Boyd, 1995. "CEO duality and firm performance: A contingency model," Strategic Management Journal, Wiley Blackwell, vol. 16(4), pages 301-312.
    12. Benjamin E. Hermalin & Michael S. Weisbach, 2003. "Boards of directors as an endogenously determined institution: a survey of the economic literature," Economic Policy Review, Federal Reserve Bank of New York, vol. 9(Apr), pages 7-26.
    13. Fizzah Malik & Fangjun Wang & Muhammad Akram Naseem & Amir Ikram & Shahid Ali, 2020. "Determinants of Corporate Social Responsibility Related to CEO Attributes: An Empirical Study," SAGE Open, , vol. 10(1), pages 21582440198, January.
    14. Manuel Arellano & Stephen Bond, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 58(2), pages 277-297.
    15. Sheikh, Shahbaz, 2018. "The impact of market competition on the relation between CEO power and firm innovation," Journal of Multinational Financial Management, Elsevier, vol. 44(C), pages 36-50.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Riaqa Mubeen & Dongping Han & Jaffar Abbas & Iftikhar Hussain, 2020. "The Effects of Market Competition, Capital Structure, and CEO Duality on Firm Performance: A Mediation Analysis by Incorporating the GMM Model Technique," Sustainability, MDPI, vol. 12(8), pages 1-18, April.
    2. Maurizio La Rocca & Francesco Fasano & Tiziana La Rocca & Neha Neha, 2024. "Women in CEO duality and firm performance in Europe," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 28(1), pages 177-214, March.
    3. Anup Banerjee & Mattias Nordqvist & Karin Hellerstedt, 2020. "The role of the board chair—A literature review and suggestions for future research," Corporate Governance: An International Review, Wiley Blackwell, vol. 28(6), pages 372-405, November.
    4. Nadia Loukil & Ouidad Yousfi, 2022. "Do CEO’s traits matter in innovation outcomes?," Journal of International Entrepreneurship, Springer, vol. 20(3), pages 375-403, September.
    5. Yang, Tina & Zhao, Shan, 2014. "CEO duality and firm performance: Evidence from an exogenous shock to the competitive environment," Journal of Banking & Finance, Elsevier, vol. 49(C), pages 534-552.
    6. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, July.
    7. Chowdhury, Md Raihan Uddin & Xie, Feixue & Hasan, Md Mahmudul, 2023. "Powerful CEOs and investment efficiency," Global Finance Journal, Elsevier, vol. 58(C).
    8. Hsu, Shufang & Lin, Shih-Wei & Chen, Wei-Peng & Huang, Jhao-Wei, 2021. "CEO duality, information costs, and firm performance," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    9. Maria Lucas-Pérez & Antonio Mínguez-Vera & Juan Baixauli-Soler & Juan Martín-Ugedo & Gregorio Sánchez-Marín, 2015. "Women on the Board and Managers’ Pay: Evidence from Spain," Journal of Business Ethics, Springer, vol. 129(2), pages 265-280, June.
    10. Beatriz Aibar-Guzmán & José-Valeriano Frías-Aceituno, 2021. "Is It Necessary to Centralize Power in the CEO to Ensure Environmental Innovation?," Administrative Sciences, MDPI, vol. 11(1), pages 1-21, March.
    11. Shahid Ali & Muhammad Akram Naseem & Junfeng Jiang & Ramiz Ur Rehman & Fizzah Malik & Muhammad Ishfaq Ahmad, 2022. "“How†and “When†CEO Duality Matter? Case of a Developing Economy," SAGE Open, , vol. 12(3), pages 21582440221, August.
    12. Chiu-Hui Wu, 2021. "On the Moderating Effects of Country Governance on the Relationships between Corporate Governance and Firm Performance," JRFM, MDPI, vol. 14(3), pages 1-13, March.
    13. Elsayed, Khaled & Wahba, Hayam, 2013. "Reinvestigating the relationship between ownership structure and inventory management: A corporate governanceperspective," International Journal of Production Economics, Elsevier, vol. 143(1), pages 207-218.
    14. Jens Grigoleit & Michael Nippa & Thomas Steger, 2011. "Ökonomische Konse quenzen der Mitgliedschaft ehemaliger Vorstandsmitglieder im Aufsichtsrat: Eine empirische Analyse," Schmalenbach Journal of Business Research, Springer, vol. 63(6), pages 578-608, September.
    15. Chengpeng Zhu & Muhammad Husnain & Saif Ullah & Muhammad Tasnim Khan & Waris Ali, 2022. "Gender Diversity and Firms’ Sustainable Performance: Moderating Role of CEO Duality in Emerging Equity Market," Sustainability, MDPI, vol. 14(12), pages 1-26, June.
    16. Md Reiazul Haque & Md Lutfur Rahman & Mohammed Abdullah Al Mamun, 2024. "Is One Head Better Than Two? Dual Leadership and Firm Performance During the COVID‐19 Crisis," Abacus, Accounting Foundation, University of Sydney, vol. 60(2), pages 236-271, June.
    17. Veprauskaitė, Elena & Adams, Mike, 2013. "Do powerful chief executives influence the financial performance of UK firms?," The British Accounting Review, Elsevier, vol. 45(3), pages 229-241.
    18. Vafeas, Nikos & Vlittis, Adamos, 2019. "Board executive committees, board decisions, and firm value," Journal of Corporate Finance, Elsevier, vol. 58(C), pages 43-63.
    19. Laura Baselga-Pascual & Antonio Trujillo-Ponce & Emilia Vähämaa & Sami Vähämaa, 2018. "Ethical Reputation of Financial Institutions: Do Board Characteristics Matter?," Journal of Business Ethics, Springer, vol. 148(3), pages 489-510, March.
    20. Neeraj Gupta & Jitendra Mahakud, 2020. "CEO characteristics and bank performance: evidence from India," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 35(8), pages 1057-1093, August.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:16:y:2024:i:14:p:6015-:d:1434979. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.