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

Weifeng Xu, Qingsong Ruan and Chang Liu
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Weifeng Xu: UNEP-Tongji Institute of Environment for Sustainable Development, School of Economics and Management, Tongji University, Shanghai 200092, China
Qingsong Ruan: UNEP-Tongji Institute of Environment for Sustainable Development, School of Economics and Management, Tongji University, Shanghai 200092, China
Chang Liu: UNEP-Tongji Institute of Environment for Sustainable Development, School of Economics and Management, Tongji University, Shanghai 200092, China

Sustainability, 2019, vol. 11, issue 24, 1-20

Abstract: With the continuous improvement of China’s overall education level, the number of top managers with famous university experience in listed companies has been increasing. The question then becomes whether the performance of the listed companies is better if there are more top managers with famous university experience in the top management team (TMT). Based on the sample of listed companies in China from 2008 to 2018, we adopted the two-way fixed effect model and panel propensity score matching (Panel-PSM) methodology to examine the impact of top managers with famous university experience on corporate performance and its mechanism. We found that the higher the proportion of top managers with famous university experience in the TMT, the better the corporate performance will be, and this positive effect is larger in companies with high business complexity. We also found that this effect is mediated by overconfidence of the TMT. The proportion of top managers with famous university experience in the TMT will inhibit the overconfidence of the TMT, which will ultimately benefit corporate performance.

Keywords: top managers; famous university experience; overconfidence; corporate performance; corporate business complexity (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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