Corporate innovation in eco-aware companies in the ASEAN region: Does the CEO's educational background matter?
Atikah Azmi Ridha Paramayuda, Iman Harymawan, Doddy Setiawan, Desi AdharianiPurpose
Corporate innovation has become an undisputed imperative for organizational success, especially for eco-aware companies in a sustainability-focused global landscape. This research aims to investigate the relationship between a chief executive officer (CEO) with reputable university education and corporate innovation in eco-aware companies in the Association of Southeast Asian Nations (ASEAN) region and predicts a positive association between a CEO with reputable university education and corporate innovation.
Design/methodology/approach
This study examines publicly listed eco-aware companies in the ASEAN region. We use regression analysis and conduct a Heckman two-stage and propensity score matching method as robustness analyses.
Findings
The findings indicate a positive association between CEOs with reputable university education and corporate innovation. Additionally, this positive association is significantly stronger in companies that exhibit superior Environmental, Social and Governance (ESG) risk management capabilities and in those operating under higher financial leverage.
Practical implications
The findings suggest that boards should prioritize CEOs with reputable university education to signal credibility in high-leverage firms and strengthen internal ESG infrastructure to effectively translate a CEO's cognitive advantages into tangible innovation.
Originality/value
This study advances upper echelons theory by integrating signaling theory to explain how a CEO with reputable university education facilitates innovation in eco-aware ASEAN firms. We identify critical boundary conditions, revealing that this relationship is contingent on internal ESG governance and external financial leverage.