CEO Industry Experience and Environmental Performance in Emerging Asian Economies: Mediating Role of Organizational Ambidexterity

Abstract

This study investigates how a CEO's industry expertise affects the environmental performance of multinational corporations, with the mediating role of organizational ambidexterity. We use a dynamic panel data approach, specifically system GMM estimates based on the Blundell-Bond specification, and we also include fixed effects models to reduce endogeneity concerns. Our research used a matched sample of 8,880 firm-year observations from 592 multinational corporations in three emerging Asian countries during a 15-year longitudinal panel from 2010 to 2024. The findings indicate that CEO industry experience is positively associated with environmental performance. The results further suggest that stakeholder pressure significantly affects the relationship between CEO experience and exploration ambidexterity, as well as the association between CEO experience and exploitation ambidexterity. Moreover, exploration and exploitation ambidexterity functions as a mediator between CEO industry expertise and environmental performance. The study contributes by linking upper echelons theory with stakeholder and dynamic capability perspectives in the context of emerging Asian economies. The study shows that the way a firm manages its environment may be altered by the features of its managers. Policy can influence these attributes through rules on CEO pay and governance.

      Keywords: CEO industry experience, environmental performance, organizational ambidexterity, stakeholder pressure, emerging Asian economies, dynamic panel data, multinational enterprises