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A path towards enterprise environmental performance improvement: How does CEO green experience matter?

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  • Xin Li
  • Fei Guo
  • Jiaqi Wang

Abstract

Nudging the amelioration of enterprise environmental performance is the micro‐foundation for effectively enhancing resource utilization and realizing sustainable development. Based on the upper echelons theory, the characteristics and previous experiences of managers determine their strategic choices and then affect the behavior of enterprises at the whole social layer. Nevertheless, the literature concerning the effect of CEO green experience on enterprise environmental performance is void. To bridge this gap, this paper uses the data of China's A‐share listed enterprises from 2010 to 2021 to empirically investigate the direct impact, influence mechanisms, and heterogeneities of CEO green experience on enterprise environmental performance. The study finds that CEO green experience can significantly promote the improvement of enterprise environmental performance. Based on the main effect, to exploring potential mechanisms behind the conclusion, we figure that environmental ethics commitment, environmental protection investment, and green technology innovation are the core mechanism approaches during the process of CEO green experience affects environmental performance. Heterogeneity analysis of CEO characteristics demonstrates that the green experience of female CEOs, older CEOs, and high educated CEOs both have a pronounced effect on ameliorating enterprise environmental performance. Furthermore, the positive effect of CEO green experience on environmental performance is more prominent in non‐state‐owned enterprises, heavily polluting industries, and regions with high environmental protection pressure. Besides providing an effective supplement for the research on managers and environmental performance, this paper also generates micro‐empirical support for government departments to formulate and optimize environmental policies.

Suggested Citation

  • Xin Li & Fei Guo & Jiaqi Wang, 2024. "A path towards enterprise environmental performance improvement: How does CEO green experience matter?," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 820-838, February.
    • Handle: RePEc:bla:bstrat:v:33:y:2024:i:2:p:820-838
    DOI: 10.1002/bse.3524
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