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Does TMT composition matter to environmental policy and firm performance? The role of organizational slack

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  • Tingko Lee
  • Wei‐Tsung Liu
  • Jun‐Xian Yu

Abstract

This study examines the relationship between the heterogeneity of top management team (TMT) composition and firm performance by focusing on the mediating role of environmental policy: a greenhouse gas (GHG) emission strategy. Organizational slack is viewed as a moderating variable that influences the above mediated relationship. Based on data from Taiwanese public firms with CSR reports, it is found that TMT educational background heterogeneity and tenure heterogeneity negatively influence firm performance, and the GHG emission strategy mediates this relationship. Moreover, this study finds that unabsorbed slack significantly strengthens the influence of TMT educational background heterogeneity on the GHG emission strategy, and unabsorbed slack also moderates the mediation effect of the GHG emission strategy on the relationship between TMT educational background heterogeneity and firm performance. The theoretical and managerial implications of the results are discussed in the discussion section and conclusions of the study.

Suggested Citation

  • Tingko Lee & Wei‐Tsung Liu & Jun‐Xian Yu, 2021. "Does TMT composition matter to environmental policy and firm performance? The role of organizational slack," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 28(1), pages 196-213, January.
    • Handle: RePEc:wly:corsem:v:28:y:2021:i:1:p:196-213
    DOI: 10.1002/csr.2042
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    2. Lawrence Loh & Thi Thuy Nguyen & Annette Singh, 2022. "The Impact of Leadership Diversity on Firm Performance in Singapore," Sustainability, MDPI, vol. 14(10), pages 1-14, May.
    3. Zhang, Wei & Qin, Chu & Zhang, Wenyao, 2023. "Top management team characteristics, technological innovation and firm's greenwashing: Evidence from China's heavy-polluting industries," Technological Forecasting and Social Change, Elsevier, vol. 191(C).
    4. Wenhao Song & Yingying Ma & Xiucheng Fan & Xuerong Peng, 2023. "Corporate environmental ethics and employee's green creativity? The perspective of environmental commitment," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(4), pages 1856-1868, July.
    5. Yanyan Li & Yu Gao & Shanxing Gao, 2023. "Organizational slack, entrepreneurial orientation, and corporate political activity: From the behavioral theory of the firm," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-12, December.
    6. Bauweraerts, Jonathan & Arzubiaga, Unai & Diaz-Moriana, Vanessa, 2022. "Going greener, performing better? The case of private family firms," Research in International Business and Finance, Elsevier, vol. 63(C).

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