Can the Famous University Experience of Top Managers Improve Corporate Performance? Evidence from China

Round 1

Reviewer 1 Report

This research is very interesting which explores whether the experience in famous universities of top managers affects the company's performance.  The authors take the proportion of top managers, rather than the individuals of top managers, with famous university experience in TMT as the independent variable. This notation is very innovative and persuasive because team decisions are more thorough than a few leaders. 

However, with regard to the independent variable, the Proportion of top managers with famous university experience in the TMT, although it is based on the proportion of top managers who graduated from famous universities in TMT, there is no further discussion about which degree those managers obtained. Some managers may get a university degree and some managers may study EMBA degrees while they are in employment. These will have different interpretations of the phenomenon of overconfidence.

This paper uses operating revenue, business scope and financial leverage are used as three indicators of business complexity. It is recommended to try the industry as an indicator, for example, whether the company is in a high-tech industry. If the empirical results are also consistent, the conclusions will be more convincing.

Author Response

Dear reviewer:

     We would like to thank you for insightful comments provided for us.we provide a point-to-point response to your comments.

Point 1. There is no further discussion about which degree those managers obtained. Some managers may get a university degree and some managers may study EMBA degrees while they are in employment. These will have different interpretations of the phenomenon of overconfidence.

Response: Thank you for providing a clearer direction for us! As the reviewer said, obtaining a famous university degree in different ways may have different effects on Overconfidence and thus affect the robustness of the conclusions of this paper. We have discussed this issue many times in the process of writing. In this paper, we define the famous university experience of top managers (page 7, lines 308-315). However, the reviewer's opinion makes us realize that our definition may be ambiguous, so we further define the famous university experience of top managers in the paper.

Point 2. This paper uses operating revenue, business scope and financial leverage are used as three indicators of business complexity. It is recommended to try the industry as an indicator, for example, whether the company is in a high-tech industry. If the empirical results are also consistent, the conclusions will be more convincing.

Response: This is an excellent suggestion to go along with the comments above. When discussing the business complexity indicators, we noticed that the famous university experience of top managers in different industries had different effects on the company's performance. In order to overcome the influence of industry factors, we use the two-way fixed effect model to control the industry fixed effect. In panel PSM model, industry factors are used as the sample matching basis. The reviewer's suggestions opened my mind. The company's business complexity can be measured not only by business level indicators, but also by industry indicators. For example, high-tech industry belongs to the industry with high "technology" business complexity, while traditional manufacturing industry and construction industry belong to the industry with low "technology" business complexity. We adopt reviewers' opinions and use industry characteristics to characterize the company's business complexity in the robustness test. According to the sample distribution of this paper, the first main business is manufacturing and construction enterprises into the enterprise group with low business complexity, and the first main business is scientific research and technology service industry, information transmission, computer service and software industry as representatives of high-tech industry into the enterprise group with high business complexity.

Attach our robustness test results.

Table 1. Moderating effect of business complexity（Robustness Test）

Notice：bcl=0, if the primary business of enterprise is manufacturing and construction；bcl=1，if the primary business of enterprise is scientific research and technology service industry, information transmission, computer service and software industry.

Reviewer 2 Report

I think that the paper is an example of very good scientific work. 

The only one suggestion, maybe decrease the number of reference to the most important.

Congratulations for Authors

Author Response

Dear reviewer:

     I'm glad to have your appreciation for our work。

   Point 1. The only one suggestion, maybe decrease the number of reference to the most important.

Response: Thank you for providing a clearer direction for us! We reexamine the references cited in the full text, eliminate some references with repeated views, and reduce similar references.