Industry Life Cycle, CEO Functional Background and Corporate Sustainable Development: Evidence from Listed Companies in China

Abstract

Based on the upper echelon theory and the contingency theory, taking China’s A-share listed companies from 1993 to 2019 as a sample, this paper applies the binary logit model and multiple linear regression model to empirically study the relationship between industry life cycle, chief executive officer (CEO) functional background and corporate sustainable development. The research shows that compared with the mature stage of the industry, companies in the growth stage of the industry are more likely to appoint CEOs with a peripheral-function background and output-function background, but less likely to appoint those with a throughput-function background; matching a CEO’s functional background and industry life cycle can stimulate corporate sustainable development under certain conditions. Further research indicates that after distinguishing corporate ownership, the matching relationship is still valid, while having different effects on the sustainable development of different ownership enterprises. The conclusion of this research not only enriches the research results of the upper echelon theory, the contingency theory and corporate sustainable development, but also provides positive enlightenments for companies in CEO appointment and cultivation, and the arrangement of career planning and selection for senior executives.