How does CEO green experience affect green innovation of energy firms? Evidence from China

CEO characteristics influence their strategic preferences, which are crucial for promoting corporate green innovation (GI). However, the influence and its mechanisms of CEO green experience (GreCEO) on GI of energy firms, especially when comparing different firm types holistically, remain understudied. This study used a moderated mediation model with fixed effects to examine the relationship between GreCEO and GI of energy firms, based on the unbalanced panel data of 821 listed Chinese energy firms during 2004-2021. We find that: (1) GreCEO positively affects energy firms' GI. (2) Heterogeneity exists in the GI effect of GreCEO regarding business ownership and industry characteristics, and this effect is more prominent in non-state-owned energy firms and high-tech energy firms. (3) Green management (GM) and debt-to-asset ratio (DAR) partially mediate GreCEO's impact on GI of energy firms. (4) Renewable energy policy (REP) moderates the relationship between GreCEO and GI of energy firms, and its influencing mechanisms. In contrast to studies that focus on the direct effect of CEO characteristics on GI, this study identifies the potential influencing mechanisms through which GreCEO affects GI of energy firms. In addition, the moderation analysis reveals the boundary condition that GreCEO affects GI, enriching our understanding of GreCEO's effect on GI from the perspective of a firm's internal conditions and external policy environment. Regarding green development, CEOs' early experience should be included in the management system and evaluation criteria of energy firms. The Chinese government should continue to implement the REP and accelerate energy firms' green transition.

Automated summary

CEO characteristics have an influence on the strategic preferences of a company, which is crucial for promoting corporate green innovation. However, the impact and mechanisms of CEO green experience (GreCEO) on the green innovation of energy firms, particularly when comparing different firm types holistically, have not been extensively studied. This study used a moderated mediation model to examine the relationship between GreCEO and green innovation of energy firms, based on unbalanced panel data from 821 listed Chinese energy firms during 2004-2021. The findings suggest that GreCEO has a positive effect on the green innovation of energy firms. There is also heterogeneity in this effect based on business ownership and industry characteristics, with a more prominent effect observed in non-state-owned and high-tech energy firms. Further analysis reveals that green management and debt-to-asset ratio partially mediate the impact of GreCEO on green innovation. The study also shows that renewable energy policy moderates the relationship between GreCEO and green innovation, as well as its influencing mechanisms. This research enriches our understanding of the effect of GreCEO on green innovation by identifying potential influencing mechanisms and exploring the boundary conditions. It suggests that CEOs' early experience should be considered in the management system and evaluation criteria of energy firms, while the Chinese government should continue implementing renewable energy policies to accelerate the green transition of energy firms.