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CEO's industry experience and emerging market SME performance: The effects of corruption and political uncertainty

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  • Morales-Solis, Juan Carlos
  • Barker III, Vincent L.
  • Cordero, Arkangel M.

Abstract

We examine how Chief Executive Officer (CEO) industry-specific experience influences firm performance in small and medium enterprises (SMEs) in emerging markets. Drawing on the upper echelons perspective and learning theory, we propose an inverted U-shaped relationship between an SME CEO's industry-specific experience and firm performance. We also argue that country corruption and political instability moderate this relationship, resulting in lower performance for SME CEOs with little industry experience or many years of industry experience in countries with high corruption or political instability. We test our hypotheses using data from the World Bank's Enterprise Survey of firms in emerging economies from 2006 to 2019. The results support our hypotheses that corruption and political instability primarily hurt the performance of SMEs with CEOs having very long industry experience. We discuss implications of this research for scholars studying SMEs in lesser-developed institutional environments and how leaders may influence SME performance.

Suggested Citation

  • Morales-Solis, Juan Carlos & Barker III, Vincent L. & Cordero, Arkangel M., 2023. "CEO's industry experience and emerging market SME performance: The effects of corruption and political uncertainty," Journal of Business Venturing Insights, Elsevier, vol. 20(C).
    • Handle: RePEc:eee:jobuve:v:20:y:2023:i:c:s2352673423000537
    DOI: 10.1016/j.jbvi.2023.e00424
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