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Article

Top Management Team Stability and Corporate Innovation Sustainability

Business School, Beijing Normal University, Beijing 100875, China
Sustainability 2024, 16(11), 4496; https://doi.org/10.3390/su16114496
Submission received: 2 April 2024 / Revised: 19 May 2024 / Accepted: 21 May 2024 / Published: 25 May 2024
(This article belongs to the Special Issue Innovation Management and Sustainability)

Abstract

In recent years, there has been growing recognition that the stability of the top management team (TMT) significantly impacts the operation and management of companies. However, few studies have focused on the impact of TMT stability on innovation sustainability. Therefore, based on the upper echelon theory and the faultline theory, this paper takes China’s A-share listed companies from 2010 to 2022 as a sample to explore the impact of TMT stability on corporate innovation sustainability, as well as the moderating effect of executive faultlines on this impact. The results indicate that TMT stability is positively correlated with corporate innovation sustainability, whereas the executive faultlines significantly weaken this correlation. The mechanism test reveals that a stable senior management team can reduce an enterprise’s operational risk through the management functions of executives, alleviate the financing constraints serving as a stability signal sent by the company to investors and creditors, and thus promote the sustainability of innovation. Heterogeneity analysis demonstrates that the influence of TMT stability on corporate innovation sustainability is more pronounced in companies with a high percentage of executive shareholdings, non-state ownership, and CEOs possessing technical expertise. This paper combines the overall stability of the executive team with the differentiation of its internal subgroups, broadens the research perspective of the upper echelon theory, and serves as a valuable reference for the development of corporate executive teams.
Keywords: top management team stability; innovation sustainability; executive faultlines; operational risk; financing constraints top management team stability; innovation sustainability; executive faultlines; operational risk; financing constraints

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MDPI and ACS Style

Tan, Z. Top Management Team Stability and Corporate Innovation Sustainability. Sustainability 2024, 16, 4496. https://doi.org/10.3390/su16114496

AMA Style

Tan Z. Top Management Team Stability and Corporate Innovation Sustainability. Sustainability. 2024; 16(11):4496. https://doi.org/10.3390/su16114496

Chicago/Turabian Style

Tan, Zukun. 2024. "Top Management Team Stability and Corporate Innovation Sustainability" Sustainability 16, no. 11: 4496. https://doi.org/10.3390/su16114496

APA Style

Tan, Z. (2024). Top Management Team Stability and Corporate Innovation Sustainability. Sustainability, 16(11), 4496. https://doi.org/10.3390/su16114496

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