The purpose of this study is to examine whether and how independent director-CEO friendliness has an impact on the enterprise's sustainable growth capability and further explore how corporate social responsibility (CSR) and executive compensation affect the relationship in the Chinese context.
Using a sample of Chinese-listed companies from 2010 to 2020, the study adopts fixed effects models to empirically analyze the effect of independent director-CEO friendliness on the enterprise's sustainable growth capability and the roles of CSR and executive compensation.
This study finds that independent director-CEO friendliness is significantly positively correlated with the sustainable growth capability of an enterprise, and this effect is enhanced with the improvement of the degree of CSR fulfillment. What is more, the positive relationship between independent director-CEO friendliness and the enterprise's sustainable growth capability becomes stronger with higher executive compensation.
Given that the existing research on sustainable growth capability mainly focused on the macroeconomic field, this study is of great theoretical significance in exploring the relationship between independent director-CEO friendliness and the enterprise's sustainable growth capability from the micro-level, contributing to the research on the enterprise's sustainable growth capability. In addition, this study considers the boundary conditions of CSR and executive compensation from internal and external perspectives, respectively, as it is innovative to elucidate organizational development from the perspective of internal and external balance.
