Top management team stability and corporate default risk: The moderating effects of industry competition and strategic deviance

Abstract

AbstractThis study takes Chinese A‐share listed firms from 2007 to 2020 as samples to examine the impact of top management team (TMT) stability on corporate default risk. The research findings reveal that TMT stability significantly mitigates corporate default risk. Furthermore, industry competition significantly strengthens the inhibitory effect of TMT stability on corporate default risk, while strategic deviance notably weakens this inhibitory effect. Heterogeneity analysis results indicate that the inhibitory effect of TMT stability on default risk is more pronounced for non‐state‐owned enterprises, firms situated in regions with higher levels of social trust, and during periods of elevated economic policy uncertainty.