The Impact Of Top Management Team Heterogeneity On Firm Performance

The 20 th National Congress of the Communist Party of China proposed to "improve the modern enterprise system with Chinese characteristics,promote the entrepreneurial spirit,and accelerate the construction of world-class enterprises." With the continuous improvement of modern corporate governance in China,the governance structure and executive team construction of listed companies in China are also constantly improving.Studies have found that factors such as gender heterogeneity,age diversity,and cultural and functional backgrounds of executive teams may have an important impact on company performance.Some research results show that heterogeneous executive teams are conducive to companies grasping changes in the market environment,more effectively formulating strategies,and thus improving company performance.At the same time,the demographic characteristics of executive teams can also serve as investment references for financial market investors to choose companies that may achieve better performance.Therefore,it is necessary to explore which combination of executive team characteristics will have a positive impact on company performance.In recent years,the discussion on the issue of "diversity" has gradually heated up internationally.For corporate governance,some countries have even mandated the racial and gender ratios of executives,and there are different voices in academia and society regarding this issue.In order to evaluate this mandatory policy,it is necessary to explore whether a certain heterogeneity variable of the executive team(such as the proportion of female executives)can directly promote the improvement of company performance.To address these issues,this paper selects data from listed companies on China’s Growth Enterprise Market and uses the method of fuzzy set qualitative comparative analysis to study the impact of executive team characteristics on company performance.As an important supplement to the main board of China,the GEM plays an important role in China’s stock market and financial market.Especially since the reform of the registration system,the GEM has continued to provide financing assistance for high-tech enterprises and small and medium-sized enterprises.Compared with the main board listed companies,the entry threshold of the GEM listed companies is relatively low.The GEM listed companies are often established soon and are in the stage of rapid development.The GEM also includes a large number of high-tech enterprises,and many companies have broad development space.This paper selects the data of companies listed on the GEM in 2021,excludes ST companies,financial companies,and companies with missing data,and finally obtains 1115 case samples for this study.Through theoretical research and literature research,we selected the size of the senior management team,the proportion of women in the senior management team,the pay gap of the senior management team,the heterogeneity of the senior management team’s educational background,and the heterogeneity of the senior management team’s functional background as the demographic characteristic variables of the senior management team,and selected ROA as the outcome variable to measure the company’s performance.This paper uses the method of fuzzy set qualitative comparative analysis(fs QCA)based on configuration theory as the research method,and uses stata software to process the collected sample data to build the variables used in this study.Using fs QCA software to calibrate the sample data,analyze the necessary conditions,truth table analysis,condition configuration analysis,and robustness test,eight high-performance senior management team configurations of GEM companies in China are obtained:configuration 1: higher senior management team size,lower salary gap,higher education level heterogeneity,and lower functional background heterogeneity;Configuration 2: lower salary gap,higher proportion of female executives,higher education background heterogeneity,and lower level of functional background heterogeneity;Configuration 3: lower salary gap,higher average age of senior management team,higher education background heterogeneity,and lower level of functional background heterogeneity;Configuration 4: higher senior management team size,lower salary gap,higher proportion of female senior managers,and higher heterogeneity of educational background;Configuration 5: higher senior management team size,lower salary gap,higher average age of senior management team,and higher educational background heterogeneity;Configuration 6: lower salary gap,higher proportion of female members of senior management team,higher average age of senior management team,and higher functional background heterogeneity of senior management team;Configuration 7: higher size of senior management team,higher proportion of female members of senior management team,higher average age of senior management team,and higher heterogeneity of educational background of senior management team;Configuration 8: higher size of senior management team,lower salary gap of senior management team,lower proportion of female members of senior management team,higher average age of senior management team,and lower functional background heterogeneity of senior management team.The consistency level of each configuration is above 0.75 and has passed the robustness test.The main conclusions of this paper are: firstly,empirical research has found that Chinese GEM companies can achieve high performance through the configuration of eight high-level management team characteristics.Secondly,in Chinese GEM listed companies,the characteristic variables of the management team jointly affect the company’s performance through configuration,and no variable can act on the company’s performance as a necessary condition alone.Thirdly,there are multiple concurrent causal relationships between the heterogeneous characteristics of the management team and the company’s performance in Chinese GEM listed companies.Based on the research in this paper,it is recommended to strengthen the disclosure of demographic characteristics of the management team of listed companies,providing more reference for financial market investors.At the same time,the construction of the management team should be comprehensively configured,not limited to a single indicator.The positive role of female executives should be valued;gender equality should be emphasized,but policies should not be too radical,to avoid over-correction.In terms of the educational background of the management team,attention should be paid to both knowledge and ability,as well as reasonable matching.