Does the Level of Environmental Uncertainty Matter in the Effect of Returnee CEO on Innovation? Evidence from Panel Threshold Analysis

Weili Huang, Guangqi Ma and Xuemeng Chen
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Weili Huang: School of Economics and Management, Shaanxi University of Science and Technology, Shaanxi 710021, China
Guangqi Ma: School of Economics and Management, Shaanxi University of Science and Technology, Shaanxi 710021, China
Xuemeng Chen: School of Economics and Management, Shaanxi University of Science and Technology, Shaanxi 710021, China

Sustainability, 2019, vol. 11, issue 9, 1-16

Abstract: This study applies a panel threshold regression model to reconcile the inconsistent findings about returnee chief executive officer (CEO) effects on enterprise innovation using the environmental uncertainty as the threshold variable and panel data from 187 publicly traded electronic firms in China for the period 2012–2016. The empirical results suggest that a significant double threshold effect does exist, showing an inverted-U correlation between returnee CEO and innovation. Specifically, a returnee CEO significantly promotes innovation at moderate levels of environmental uncertainty but significantly hinders innovation when the environmental uncertainty surpasses the larger threshold value, which contradicts much of the previous literature. This research enriches the scholarship on returnee CEOs and lays a theoretical foundation that firms can use in corporate governance. If firms pay more attention to environmental uncertainty while formulating new CEO introduction policies, substantial innovation ability can be improved at moderate levels of environmental uncertainty.

Keywords: returnee CEO; enterprise innovation; environmental uncertainty; threshold effect (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 (2)

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