Role of Managerial Ability in Environmental, Social, and Economics Sustainability: An Empirical Evidence from China

Abstract

The current study analyzed whether the enhancement in managerial ability accelerates the environmental, social, and economic sustainability practices or not. Using panel data methodology on Chinese listed firms data from 2010 to 2019, we report that CEOs' managerial ability impacts the overall (environmental, social, and economic) sustainability practices of the firms positively. Moreover, we find that social sustainability and economic sustainability also increase with the increase of the CEO's managerial ability in the firm. The results remain robust after several alternative empirical tests. The findings justify the relationship between management skills and sustainability and demonstrate how each one of the sustainability pillars is affected individually. The support for sustainability practices that can be achieved through the communication of management skills is an essential conclusion for practitioners. Findings establish the link between CEO's managerial ability and environmental, social, and economic sustainability performance by taking insights from upper echelon theory.