While military leadership positions are increasingly common in Chinese firms and environmental, social and governance (ESG) demands are growing, the impact of military experience on ESG performance remains underexplored. This research aims to narrow this knowledge gap.
Grounded in upper echelons theory, imprinting theory and military sociology, we conduct an empirical analysis using panel data from Chinese A-share listed companies between 2011 and 2020. We employ fixed-effects regression models and a battery of endogeneity and robustness tests to validate our findings.
Military strategic leaders have a statistically and economically significant positive effect on firms’ ESG performance, increasing ESG scores by an average of 1.33 units. Mechanistic analyses suggest that this effect operates through enhanced risk-taking behaviors and greater external stakeholder attention. Furthermore, heterogeneity tests reveal that this positive effect is more pronounced in firms that are heavily polluting or smaller in size.
First, this study extends the domain of military strategic leadership by providing empirical evidence that such leaders shape firms’ nonfinancial outcomes, particularly ESG performance. Second, this study uncovers two novel mechanisms – internal risk-taking discipline and enhanced external visibility – through which military-experienced executives influence ESG strategy implementation. Third, this study enriches the ESG literature by identifying the executive military background as a distinct and impactful antecedent of ESG outcomes, thereby advancing our understanding of how top management characteristics inform sustainable strategic choices.
