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Based on upper echelons (UE) theory, the purpose of this study is to investigate a conceptualized moderated mediation model for examining the effects of top management team (TMT) heterogeneity and firm value in China through the mediating effect of product diversification, the moderating effect of ownership type between TMT heterogeneity and product diversification and the moderating effect of executive shareholding between product diversification and firm value.

Unbalanced panel data were collected over 5 years with a total of 6,597 observations, organized through the WIND (Wind Economic Database) and CSMAR (China Stock Market and Accounting Research) Database. The hypotheses were tested using structural equation modeling and analyzed with stata15.0 software.

The results indicated that product diversification plays a mediating role between TMT heterogeneity and firm value. In China, TMT heterogeneity of non–state-owned enterprises plays a more significant role in promoting product diversification than that of state-owned enterprises; executive shareholding strengthens the relationship between product diversification and firm value.

The characteristic dimension of TMT is seen as a relatively static factor, and it is worth looking at whether a more dynamic system of evaluation and measurement can be established.

This study enriches theoretical research on TMT and contributes to UE theory in several ways. First, we studied the mediation effect of product diversification between TMT heterogeneity and firm value. This extends research on UE theory to possible process variables. Second, considering the influence of the unique institutional environment in China on corporate strategic decisions, the study investigates state-owned and non–state-owned enterprises. Specifically, it looks at the influence of ownership type as a moderating variable between TMT heterogeneity and product diversification. Third, the paper discusses the moderating effect of executive shareholding on the product diversification–firm value relationship. The research contributes to agency theory and expands research on different economic systems by implementing agency theory.

From the perspective of top management heterogeneity, this paper aims to study the impact of the psychological traits of executive pay bandwagon on earnings management in the listed companies of China.

This paper applies the ratio of executive pay to the median pay level of executives in firms of similar size and industry, namely, the comparing coefficient, as an alternative variable of executive pay bandwagon, and earnings management as the behavior choice of executive pay bandwagon, to examine whether executives in the listed companies of China have comparing mentality, and whether the result is influenced by executive heterogeneity by using the multiple linear regression models.

The lower the executives’ compensation is than the median pay level of executives in firms of similar size and industry, the stronger the incentive the executives have to compare with others whose pay is higher, increasing the extent of earnings management in the future, and executives tend to use real activities manipulation rather than accrual-based earnings management to increase their performance-based compensation. As pay bandwagon is a kind of executives’ individual psychological reaction, in a large extent, its behavioral performance is likely to be affected by executive heterogeneity. Specifically, when the proportion of male executives, young executives or low educated executives is relatively high, or executives are located in remote cities, there will breed more earnings management behaviors induced by pay bandwagon. Further study shows that pay bandwagon is positively correlated with rigging compensation based on real earnings management and pay bandwagon also has significantly negative effects on the firms’ future value creation.

Pay bandwagon is an important inducement of executives’ earnings management, with implication that for executives with different characteristics, one should pay attention to the subjective psychological perception and expectation of their pay in the future studies related to executives’ compensation incentives.

This study introduces the research within sociology, psychology and experimental economics, and considers the executives’ subjective perception of their pay, to explore the internal mechanism that executives affect firm performance via a specific earnings management method and to implement self-interested behavior due to pay bandwagon. And this is the first study to select several typical executive individual characteristics to investigate the influence of executive heterogeneity on pay bandwagon and its economic consequences.

This study aims to reveal the mechanism of CEO overconfidence in the digital transformation of specialized, refined, distinctive and innovative (SRDI) enterprises, thereby enriching research related to upper echelons theory and corporate digital transformation.

This study uses listed SRDI companies in China from 2017 to 2022 as a sample and adopts a fixed-effects regression model to analyze the direct, mediating, and moderating effects of CEO overconfidence on corporate digital transformation.

First, CEO overconfidence significantly promotes SRDI enterprises' digital transformation. Second, according to the “cognition-behavior-outcome” model, we found that entrepreneurial orientation plays a mediating role. Third, based on the principle of procedural rationality and the interaction perspective between the CEO and the executive team, we introduce the heterogeneity of the executive team as a moderating variable. Our findings indicate that age heterogeneity within the executive team has a negative moderating effect, whereas educational and occupational heterogeneities have positive moderating effects.

This study expands on earlier research that focuses primarily on CEO demographic characteristics. It enriches the analytical perspective of upper echelons theory on corporate digital transformation by analyzing the psychological characteristics of CEOs, that is, overconfidence and its mediating pathways. Moreover, this study goes beyond the previous literature that does not differentiate between CEOs and executive teams by introducing the concept of CEOs' interactions with the executive team and including the heterogeneity of the executive team as a moderating variable in the literature. Thus, continuing to deepen the application of upper echelons theory to corporate digital transformation. Additionally, this study contributes to the literature on the positive consequences of overconfidence.

The purpose of this paper is to expand the understanding of the “front end” of innovation by examining the influence of top executives, who allocate the resources and cultivate the culture in which inventions are born, on the innovation process.

This paper suggests that the effect of executives on innovation can be better understood by explicitly separating innovation into the component processes of invention and commercialization. This allows us to consider how executive characteristics might have a different effect on technology development outcomes than they do on the subsequent transformation of those technologies into new products. The theory is tested on a sample of firms from the biomedical device industry.

The findings indicate that top management team (TMT) age and tenure have no effect on the type of technologies a firm develops (radical vs incremental) but do significantly affect the efficiency with which new technologies are turned into new products in some contexts. TMT heterogeneity affects both the type of technologies developed in the firm and also their transformation to new products. Interestingly, the effect of executives on commercialization depends on the type of underlying technologies which the firm has developed.

This paper contributes to the literatures on TMTs and innovation by offering a more granular explanation of how executives differentially impact the disaggregated stages of the innovation process, and thus also contributes to knowledge of the long-term innovation performance implications of executive leadership.

This chapter estimates a dynamic reduced-form model of intra-firm promotions using an employer–employee panel of over 300 of the largest corporations in the United States in the period from 1981 to 1988. The estimation conditions on unobserved individual heterogeneity and allows for both an endogenous initial condition and sample attrition linked to individual heterogeneity in demonstrating the relative importance of variables that influence promotion. The role of the executive’s functional area in promotion is considered along with the existence and source of promotion fast tracks. We find that while the principal determinant of promotions is unobserved individual heterogeneity, functional area has a high explanatory power, resulting in promotion probabilities that differ by functional area for executives at the same reporting level and firm. No evidence is found that an executive’s recent speed of advancement in pay grade has a positive causal impact on in-sample promotions after conditioning on the executive’s career speed of advancement, except for the lowest level executives the data. Fast tracks appear to largely result from heterogeneity in persistent individual characteristics, not from an inherent benefit in recent advancement itself.

We formulate static and dynamic empirical models of promotion where the current promotion probability depends on the hierarchical level in the firm, individual human capital, unobserved individual specific attributes, time-varying firm-specific variables, as well as endogenous past promotion histories (in the dynamic version). Within the static versions, we investigate the relative influence of the key determinants of promotions and how these influences vary by hierarchical levels. In the dynamic version of the model, we examine the causal effect of past speed of promotion on promotion outcomes. The model is fit on an eight-year panel of 30,000 American executives employed in more than 300 different firms. The stochastic process generating promotions may be viewed as a series of promotion probabilities which become smaller as an individual moves up in the hierarchy and which are primarily explained by unobserved heterogeneity and promotion opportunities. Firm variables and observed human capital variables (age, tenure, and education) play a surprisingly small role. We also find that, conditional on unobservables, the promotion probability is only enhanced by the speed of promotion achieved in the past (a structural fast track effect) for a subset of the population and is negative for the majority. In general, the magnitude of the individual-specific effect of past speed of promotion is inversely related to schooling, tenure, and hierarchical level.

The purpose of this paper is to discuss the influence of different aspects of top management team (TMT) functional background on short-term performance, long-term performance, innovation performance and oversea performance separately. This research aims to verify whether the social categorization theory and information and decision-making theory are applicable in listed companies of China’s information technology (IT) industry so as to provide key theoretical references for TMT enhancement ad corporate performance improvement.

This paper takes A-share listed companies in Shanghai Stock Exchange and Shenzhen Stock Exchange as its study subjects, and it chooses the data from 2004 to 2010 in all of the 105 companies in IT industry in terms of the classification of Wind Database. The stepwise multiple regressions were run utilizing the regression program in Statistical Product and Service Solutions (SPSS).

The research results show that the social categorization theory can better explain TMT’s influence on corporate performance. TMT functional heterogeneity does not contribute to improving corporate performance and shows significant negative influence on short-term performance and innovation performance in particular. Among the three basic functional backgrounds, TMTs dominated by “throughput” backgrounds show significant positive influence on short-term performance, long-term performance, innovation performance and overseas performance, and the influence turns out to be the largest among these three backgrounds. In terms of the three special professional experiences, top executives with overseas backgrounds have significant positive influence on all of short-term, long-term, innovation and overseas performances. Externally hired executives, however, would impede corporate innovation development, while those with government background would increase corporate overseas performance.

This paper analyzes the relationship between TMT functional background and corporate performance in a comprehensive way for the first time and then takes the lead in considering the dynamics and complexity of corporate performance as well as discussing the influence of TMT functional background on four corporate performances. This study not only supports the effect that the social categorization theory has on TMTs but also offers some inspirations on the development of China’s IT companies.

This study investigates the effect of psychic distance (PD) on outward foreign direct investment (OFDI) by multinational firms originating in emerging economies and the moderating effect of firm heterogeneity on this relationship.

An empirical analysis based on a negative binomial regression model is conducted using OFDI data from 2008 to 2017 on companies listed on the Shanghai and Shenzhen Stock Exchanges in China, an emerging economy.

The results suggest a U-shaped relationship between PD and OFDI by firms in emerging economies. Both executive foreign experience and state ownership negatively moderate the U-shaped relationship between PD and OFDI.

Emerging economies should encourage and guide multinational firms in engaging in OFDI and emphasize the advantages and disadvantages of PD for multinational firms. Additionally, non-sate-owned firms should recruit those who have a foreign education to provide support for OFDI by firms in emerging economies. Multinational firms should determine investment locations by consulting with executives with foreign experience to improve their ability to engage in OFDI.

This study combines macro and micro perspectives and integrates PD and firm heterogeneity into the same model with a sample of multinational firms originating in China. The findings support the existence of a PD paradox, which helps to enriching the theory on foreign direct investment.

This study aims to investigate the association between executives with foreign backgrounds and the audit fees paid by the Chinese-listed firms over the period from 2010 to 2020.

To examine the association between executives’ foreign experience and audit fees, this study constructs the following empirical model: Lnfee_i,t = β₀ + β₁Foreign background_i,t + ∑β_j Control_i,t + YearFE + IndFE + ε_i,t (1).

This study finds that auditors charge higher fees for firms hiring more executives with foreign backgrounds. The results are robust to a battery of robustness checks, including fixed effects, alternative measures of independent variable, controlling for other characteristics of executives and auditors and entropy balancing method.

This study sheds light on how executives’ foreign backgrounds affect audit fees, enriching the literature on executive heterogeneity and audit fees and providing important implications for audit practitioners.

The purpose of this paper is to form propositions about the relationship between top management team (TMT) heterogeneity and peer effects in investment decision-making and explore the mediating role of social learning processes.

To investigate the correlations between TMT heterogeneity and investment peer effects, we considered the TMT heterogeneity category, team process and contextual factors. With a sample of 8,467 firm-year observations from Chinese listed companies, we used the mean linear model and instrumental variable method to empirically examine their relationships. To identify the mediating role of social learning processes, we introduced a social learning model to find out the contextual factors influencing corporate social learning demands from three aspects and subsequently used comparative statics analysis to explore the variations in the main effect under these contextual factors.

For task-oriented heterogeneity (e.g. functional background, education and tenure heterogeneity), the opposite effects of information elaboration and social categorization processes make it a nonlinear multiplex correlation with investment peer effects. For relation-oriented heterogeneity (e.g. age and gender heterogeneity), the sole effect of social categorization processes leads to a negative linear correlation. Further, we identify the mediating role of social learning processes. In summary, we established a connection from the TMT heterogeneity, to information elaboration theory or social categorization theory, to social learning processes and ultimately to investment peer effects.

The results of this study provide a comprehensive perspective to predict the decision-making outcomes of team heterogeneity and contribute to heterogeneity research and practice.