CEO Tenure and Sustainable Growth: Non‐Linear Effects and Strategic Trade‐Offs Between Sustainability Dimensions

ABSTRACT

This study examines how CEO tenure influences firm sustainable growth across economic and social dimensions and whether it is associated with sustainability trade‐offs. Prior research has largely focused on short‐term performance measures and linear CEO tenure effects, providing limited evidence on sustainable growth and potential trade‐offs across sustainability dimensions. Using panel data from 272 publicly listed Vietnamese firms from 2011 to 2022, we employ fixed‐effects models, system GMM, and seemingly unrelated regression. The results show that CEO tenure has non‐linear effects on sustainable growth: a U‐shaped relationship with economic sustainability and an inverted U‐shaped relationship with social sustainability. Evidence of a negative residual correlation between the two dimensions suggests the possibility of sustainability trade‐offs among these two aspects. Furthermore, the relationship between CEO tenure and sustainability trade‐offs is evident only among firms with positive economic sustainability. This study contributes to the CEO tenure and sustainability literature by demonstrating that CEO tenure affects sustainable growth differently across economic and social dimensions and by identifying the non‐linear nature of these relationships. It also extends the sustainability trade‐off literature by showing that CEO tenure is associated with sustainability trade‐offs under specific performance conditions, offering important implications for board succession planning, executive monitoring, and the pursuit of balanced long‐term sustainable growth. These findings highlight the multidimensional and dynamic nature of CEO tenure effects on sustainable growth.