HOW DOES TMT HETEROGENEITY SHAPE CORPORATE INNOVATION? THE CONDITIONAL EFFECT OF UNCERTAINTY RISK PERCEPTION
Keywords:
Uncertainty perception, Top management team (TMT) characteristics, Corporate innovation, Upper echelons theory, Mediating effectAbstract
Drawing on upper echelons theory and behavioral decision theory, this study examines how top management team (TMT) characteristics shape corporate innovation through firms' perceived uncertainty risk. Using a panel of Chinese A-share listed firms from 2013 to 2023, we find that perceived uncertainty risk significantly suppresses both innovation input and innovation output, suggesting that firms become less willing to commit resources to innovation when they perceive a higher level of external uncertainty. We further document substantial heterogeneity across TMT characteristics. Executives with higher educational attainment and R&D-related experience are associated with greater R&D investment and higher patent output, whereas older executive teams and those with stronger finance backgrounds tend to exhibit lower levels of innovation activity. Mediation analyses further reveal a partial mediating effect of perceived uncertainty risk in the relationship between selected TMT attributes and corporate innovation. Specifically, executive gender composition, educational attainment, and R&D experience promote innovation partly by reducing firms' perceived exposure to external uncertainty, thereby strengthening innovation incentives and improving patent outcomes. By contrast, the effects of executive age, overseas experience, and financial background do not operate through this uncertainty-perception channel. This study further extends upper echelons theory by identifying perceived uncertainty risk as a cognitive mechanism through which TMT characteristics influence innovation decisions. The findings offer practical implications for optimizing executive team composition, strengthening innovation resilience, and improving firms' strategic responses to uncertain external environments.References
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