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Top management team heterogeneity and corporate ESG performance

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  • Dong, Haiyan
  • Zhang, Cong
  • Teng, Wei

Abstract

Corporate sustainability practices have gained increasing importance; however, the role of top management team (TMT) composition in driving environmental, social, and governance (ESG) performance remains underexplored, especially in emerging markets. This study examines the impact of TMT heterogeneity on ESG performance in Chinese listed companies, considering gender, educational, and professional heterogeneities. Using panel data from 2009 to 2022, we employ fixed-effects regression and two-stage least squares analysis to address endogeneity concerns. Results reveal distinct patterns across ESG components. Professional experience heterogeneity strongly enhances environmental performance, while all three heterogeneity dimensions positively influence social performance. Gender heterogeneity exhibits varying effects, positively affecting social and governance aspects but displaying a slight negative association with environmental initiatives. Higher levels of green perception among TMT members strengthen these relationships. These findings contribute to the upper echelons theory and resource-based view of firms by demonstrating how different aspects of TMT heterogeneity distinctly influence sustainability outcomes, offering nuanced insights for corporate governance practices and sustainability management.

Suggested Citation

  • Dong, Haiyan & Zhang, Cong & Teng, Wei, 2025. "Top management team heterogeneity and corporate ESG performance," Finance Research Letters, Elsevier, vol. 73(C).
    • Handle: RePEc:eee:finlet:v:73:y:2025:i:c:s1544612324016398
    DOI: 10.1016/j.frl.2024.106610
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    References listed on IDEAS

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    More about this item

    Keywords

    Top Management Team Heterogeneity; ESG Performance; Green Perception; Corporate Governance;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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