Mukherjee and Sen Financial Innovation

https://doi.org/10.1186/s40854-022-00344-7
(2022) 8:40
Financial Innovation

RESEARCH Open Access

Impact of CEO attributes on corporate

reputation, financial performance,
and corporate sustainable growth: evidence
from India
Tutun Mukherjee1* and Som Sankar Sen2

*Correspondence:
tutun.mukherjee@sxuk. Abstract
edu.in This article investigates the impact of CEO attributes on corporate reputation, finan-
1
Xavier Law School, St.
Xavier’s University Action cial performance, and corporate sustainable growth in India. Using static panel data
Area III, B, Newtown, Kolkata, methodology for a sample of NSE listed leading 138 non-financial companies over the
West Bengal 700160, India time-frame 2011 to 2018, we find that CEO remuneration and tenure maintains signifi-
Full list of author information
is available at the end of the cant positive associations with corporate reputation, while duality and CEO busyness
article are found to be associated with corporate reputation negatively. The results also show
that female CEOs and CEO remuneration are associated with corporate financial per-
formance positively, whereas CEO busyness, as expected, holds a significant negative
relationship with corporate financial performance. Moreover, the results demonstrate
that CEO age is associated with corporate sustainable growth negatively, while tenure
appears to have a significant and positive association with corporate sustainable
growth. The results are robust to various tests and suggest that in the Indian context,
demographic and job-specific attributes of CEOs exert significant influence on corpo-
rate reputation, financial performance, and corporate sustainable growth. The empirical
findings would provide a basis for the shareholders and companies to identify areas of
consideration when appointing CEOs and determining their roles and responsibilities.
Keywords: CEO attributes, Corporate reputation, Financial performance, Corporate
sustainable growth, Panel data methodology
JEL Classification: G30, G40, L25

Introduction
Leadership in organizations, regardless of size and form, is considered crucial to their
success and growth (Wood and Vilkinas 2005). In today’s vibrant corporate world, char-
acterized by heightened market competitions, technological changes, volatility in infla-
tion and interest rates, fluctuating exchange rates, tax law changes, and environmental
issues, among others (Van Horne and Wachowicz 2015), the role of top management,
especially CEO’s, in shaping the organization as a whole is indispensable (Gordon et al.
2021; Li and Singal 2017; Berson et al. 2008). The CEO holds the top position in a firm

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Mukherjee and Sen Financial Innovation (2022) 8:40 Page 2 of 50

(Ting et al. 2017) and certainly, the face of the company (Gorn et al. 2008, as cited in
Canace et al. 2020). The authority of overseeing the company’s overall operations, mak-
ing crucial strategic choices, and assessing the efficient use of the company’s resources
is entrusted to the CEO (Lindeman 2019). As such, within any organization, "the lever
of power is uniquely concentrated in the hands of the CEO” (Nadler and Heilbern 1998,
as cited in You et al. 2020), and arguably even the obligations, to set the direction of the
firm (Hambrick and Mason 1984).
Given the strategic importance of the CEO’s role, researchers and practitioners have
become increasingly interested in exploring how CEOs affect the organizations that they
lead. One of the primary ways that CEOs influence the way their firms manoeuvre, as
argued by Berson et al. (2008), is by articulating the different sets of values they hold. An
individual’s value system includes his or her beliefs regarding acceptable modes of con-
duct in specific contexts, acting as principles that guide actions (Kluckhohn 1951). CEOs
imprint their firms with their values through their strategic decisions (Agle et al. 1999).
Moreover, the choices of executives, as argued by Zhu and Chen (2015a, 2015b), are
swayed by their disposition and pre-existing experiences, and they choose organizational
strategies that match their managerial schemas and preferences (as cited in Al-Sham-
mari et al. 2019). Consistent with this, strategic decisions, according to strategic choice
theory, are influenced by the beliefs, psychology, and experience of the main actors
in an organization (Zor et al. 2019). This is because managerial decisions are depend-
ent on how the decision-makers evaluate the organizations’ position (Child 1997). The
empirical literature provides strong support to the very notion that CEO’s value system,
disposition, and pre-existing experience proxied by CEO’s demographic, psychological
and job-specific attributes do matter and exert significant influence on their strategic
choices and actions such as capital budgeting practices (see Zor et al. 2019), corporate
risk-taking (see Martino et al. 2020; Farag and Mallin 2016), investment decisions (see
Gupta et al. 2018; Serfling 2012; Li et al. 2011), corporate leverage (see Nilmawati et al.
2021; Kaur and Singh 2020; Ting et al. 2015; Tomak 2013), dividend policy (See Briano-
Turrent et al. 2020), financial reporting policy (see Huang et al. 2012), merger and acqui-
sition (see Li and Tang 2010; Brown and Sarma 2007), earnings management practices
(Bouaziz et al. 2020; Qawasmeh and Azzam 2020), R&D spending (see Barker III and
Mueller 2002; Lefebvre and Lefebvre 1992), and CSR practices (Xu and Hou 2021; Tran
and Pham 2020; Li et al. 2020; Huang 2013), among others.
Similarly, upper echelons theory (Hambrick and Mason 1984) suggests that “firms
are the mirror reflection of top management, and their performance is significantly
influenced by the experiences, values, and personalities of decision-makers” (as cited
in Gupta and Mahakud 2020). Hence, being a crucial member of the top management
team and a decision-maker, CEOs influence organizational outcomes and structures
through their strategic choices and actions, which are eventually a reflection of their
characteristics (Finkelstein and Hambrick 1996). On the contrary, researchers, for exam-
ple, Galbraith (1984) and Aldrich (1979) argue that top executives’ efforts and leader-
ships do make a very little or no impact on corporate outcomes; corporate outcomes
are the product of industry and company-specific factors. Furthermore, organizational
outcomes are driven by environmental factors and industry trends, not by the work
of top executives or their functional backgrounds (Bruton et al. 2010; Scott 2007). It’s
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 3 of 50

worth noting, however, that the contextual variables, for example, industry and com-
pany-specific factors, technological factors, and environmental factors are the tangen-
tial elements and do make a very little difference in corporate outcomes (Child 1972,
1997). Because it is not these variables that decide and act; it is managers who decide
the strategic action(s) to adopt in a particular context and how to use them (Zor et al.
2019)—and they likely differ in their traits, notably, their education, age, experience, and
personality, among others. Accordingly, a CEO’s psychological and observable traits do
influence his or her choices and actions and hence organizational outcomes (Ren et al.
2020; Wang and Chen 2020; Gupta et al. 2018; Baker and Wurgler 2013; Chatterjee and
Hambrick 2007). This view is supported by prior empirical research. With respect to
demographic and job-specific attributes, for example, Lim and Lee (2019) find that the
characteristics of CEOs such as tenure, ownership, and affiliation exert significant influ-
ence on corporate cash holding in Korea. In investigating the relationship between CEO
attributes and corporate value, Liu and Jiang (2020) observe that CEO attributes like
tenure and political ties are significantly associated with the value of the firm in China.
More recently, the research by Edi et al. (2020) indicate that firms can maximize their
reputation and performance by choosing experienced, capable and aggressive CEOs in
Indonesia. You et al. (2020) find that CEOs attributes such as demographics, experience
and compensation affect a firm’s innovation and stock returns. Using North American
publicly traded hospitality companies as a sample, Li and Singal (2017) find that CEOs
attributes such as gender, age, and experience maintains significant associations with
corporate financial performance as measured by ROA, Tobin’s q and stock return. Like-
wise, many other studies (e.g. Bandiera et al. 2020; Saidu 2019; Wei et al. 2018; Kaur and
Singh 2018a; Weng and Chen 2017; Diks 2016; Amran et al. 2014; Peni 2014) documents
very similar results, supporting upper echelons theory. Furthermore, empirical studies
provide evidence that knowledge about CEO’s inherent personality traits, for instance,
overconfidence (see Hirshleifer et al. 2012; Doukas and Petmezas 2007; Malmendier and
Tate 2005), narcissism (see Brouwer 2018; Wang 2016), risk-tolerance (see Gordon et al.
2021), military background (see Lin et al. 2018; Benmelech and Frydman 2015), and
political ideology (see Wei et al. 2018; Kashmiri and Mahajan 2017; Unsal et al. 2016),
among others, are important and relevant for firms to operate efficiently.
The characteristics of CEOs do matter for improving corporate financial performance,
as reported by several studies; no matter whether the enterprises are large, micro, small
or medium-sized. Moreover, the leadership behaviour of the CEO, as argued by Ren
et al. (2020) and Love et al. (2017) may influence the enterprises’ sustainable growth and
reputation as his/her strategic decision-making directly affects the enterprise’s financial
performance. However, it seems that prior studies have focused extensively on inves-
tigating the linkage between CEOs attributes and corporate financial performance—a
short-term perspective, no emphasis to the best of our knowledge has been given to the
enterprises’ long-term dimensions −′ the engine for value creation and business sus-
tainability’. Notably, at present, the concept of sustainable growth seems to have capti-
vated the broad-based attention that traditional growth concepts lack (Mensah 2019),
and gradually, the paradigm is becoming an integral part of the agenda of the corpo-
rate world too (Mukherjee and Sen 2019b). A mere maximizing growth perhaps may
assist the firm to accomplish its short-term goals, but not the long-run objective what
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 4 of 50

they seek to—the ‘value-creation’ (Ramezani et al. 2001). The value-creation maximizes
around the sustainable growth rate of an organization and decreases sharply, once actual
growth exceeds the sustainable growth rate (Ataünal et al. 2016). In conjunction, manag-
ers are very concerned about establishing and maintaining a positive overall reputation
(Schulz and Flickinger 2018). Because they did realize that in the recent highly competi-
tive and dynamic business environment, corporate reputation is a valuable intangible
asset—capable of influencing a firm’s ability to create and sustain competitive advantage
in the market (Deephouse 2000; Barney 1991), ensuring business sustainability. Given
the strategic importance, whether the characteristics of the CEO affect the corporate
reputation and corporate sustainable growth are still untapped to date.
Moreover, with exception to a few (e.g. Friedmann et al. 2018; Kaur and Singh 2018a;
Raithatha and Komera 2016; Pandey et al. 2015), not much research has demonstrated
the profound influence of the characteristics of CEOs on corporate outcomes in the
context of the Indian market. With a population base of more than 1.25 billion, India is
the world’s largest democracy. Over the years, the country has emerged as an attractive
investment destination, a manufacturing hub (Vaish and Daruwala 2021). “The capital
markets in India are one of the fastest-growing markets in the world, attracting huge for-
eign investments” (Charantimath 2020, p. 140). According to a recent report by FICCI
and Economic Survey of India, the country has received an eye-catching foreign direct
investment (FDI) inflow of USD 81.72 billion in the fiscal year 2020–2021, attaining a
10 per cent rate of growth year-over-year (Loss and Bascunan 2020). And it is expected
that the manufacturing sector of India could reach USD 1 trillion by 2025, with the sec-
tor accounting for around 25 per cent of the GDP and creating 90 million domestic
jobs by that period (Charantimath 2020). More importantly, the country’s economy, as
per the World Bank’s latest projection, is expected to grow at 8.3 per cent for the fiscal
year 2021–2022, prompting many prominent global companies to create a niche in this
emerging market (Khanka 2020).
Therefore, the present study endeavours to investigate the impact of CEO attributes on
corporate reputation, financial performance, and corporate sustainable growth in India.
In doing so, this study contributes to the extant literature in several ways. First, the prior
researches (e.g. You et al. 2020; Lim and Lee 2019; Ernestine and Setyaningrum 2019;
Kaur and Singh 2018a; Bandiera et al. 2017; Diks 2016; Katsaros et al. 2015; Amran et al.
2014) have primarily focused on the effects of CEO attributes on corporate financial per-
formance—a short-term perspective. This study by integrating corporate reputation and
corporate sustainable growth within the existing framework shows the impact of CEOs
attributes on both corporate perspectives, viz. short-term and long-term goals under
one roof. Second, as mentioned, with exception to a few (e.g. Friedmann et al. 2018; Kaur
and Singh 2018a; Raithatha and Komera 2016; Pandey et al. 2015), not much research
has demonstrated the profound influence of the characteristics of CEOs on corporate
outcomes in the context of the Indian market. The present study contributes to the exist-
ing literature by presenting the first-ever empirical evidence from an emerging economy
like India on the impact of CEO’s attributes on three diverse corporate dimensions, viz.
corporate reputation, financial performance, and corporate sustainable growth. Third,
the majority of the earlier studies exploring the effects of CEO traits on corporate out-
comes have either focused on the CEO’s demographic characteristics (e.g. Ghardallou
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 5 of 50

et al. 2020; Briano-Turrent et al. 2020; Saidu 2019; Lunkes et al. 2019; Li and Singal
2017; Baloyi and Nwakwe 2017; Zhang et al. 2016; Huang 2013) or job-specific traits
(e.g.Zoghlami 2021; Al-Shammari 2021; Wijethilake and Ekanayake 2019; Schulz and
Flickinger 2018; Smirnova and Zavertiaera 2017; Raithatha and Komera 2016; Duru et al.
2016; Pandey et al. 2015). This study also enriches the existing literature by introducing
both the demographic and job-specific attributes of the CEO under one roof, captur-
ing a comprehensive picture of the CEO’s identity in explaining corporate reputation,
financial performance, and corporate sustainable growth. Fourth, most importantly, the
present study uses several alternative specifications and estimation techniques for data
analysis, including 2SLS, 3SLS, and dynamic Sys-GMM to control for endogeneity issues
effectively. Fifth, this study contributes to the framework upon which the policy-makers
could take appropriate policies on corporate governance and other codes of best prac-
tice. Sixth, this research provides a basis for the shareholders and companies to identify
areas of consideration when appointing CEOs and determining their roles and responsi-
bilities. Finally, this research can be an essential source of information for investors and
corporate managers when it comes to formulating and implementing investment policy.
The remainder of the paper proceeds as follows: Sect. 2 presents the review of relevant
literature and the development of hypotheses. Section 3 describes the sample, research
model, and variables. Section 4 presents empirical analysis and hypotheses testing
results. Section 5 discusses the results, and Sect. 6 concludes the paper.

Literature review and development of hypotheses

Theoretical perspectives
There has been a dramatic increase in academic interest in the top executives of business
organizations. A key theory that has accompanied and most likely fueled this upsurge
in interest in top executives—the Upper Echelons theory (Nielsen 2010; Finkelstein
et al. 2009; Carpenter et al. 2004, as cited in Hiebl 2014). Upper Echelons theory was
initially introduced by Hambrick and Mason (1984), which posits that “an organization
is a reflection of its top executives”. This theory postulates that top executives analyze
situations and prospective decisions via a lens, sculpted by their attributes (Hambrick
et al. 2015). These lenses thereby leverage the strategic choice (e.g. innovation, diversi-
fication, capital structure, and dividend policy, among others) and organization perfor-
mance (e.g. profitability, growth, and survival, among others) (Thijssen 2017; Carpenter
et al. 2004). This suggests that organizational outcomes, strategic choices and actions
and level of performance are determined by executives’ background attributes or traits
(Hambrick and Mason 1984). The theory, further states that top executives’ discretion is
largely influenced by cognitive, psychological and social factors (Farag and Mallin 2016).
However, cognitive bases and values are hard-to-obtain variables; information regard-
ing these aspects is quite difficult to acquire (Kaur and Singh 2020). Given the challenge
of quantifying cognition and perception, the upper echelons perspective views observ-
able demographic traits as measures for cognitive frames (Hambrick 2007, as cited in
Guathier et al. 2019). Such observable demographic attributes include age, tenure, func-
tional background, education, socio-economic roots, and financial position, among
others (Zandi et al. 2019; López-Munoz and Escribá-Esteve 2017). On the other side
of the spectrum, scholars, for instance, Aldrich (1979), Hall (1977), and Lieberson and
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 6 of 50

O’Connor (1972) do hold a completely different notion, that organizational outcomes are
the product of industry and company-specific factors; top executive’s efforts and leader-
ships does make a very little or no impact on corporate performance (Galbraith 1984).
Similarly, the proponents of institutional theory argue that organizational performance
is driven by environmental factors and industry trends, not by the work of top executives
or their functional backgrounds (Bruton et al. 2010; Scott 2007). They put forward that
business units and institutions are not merely the production houses, rather they are
social and cultural systems being composed of cultural-cognitive, normative, and regular
components that, in conjunction with related activities and resources, influence the way
various groups, business units and firms position themselves to pursue their long term
goals of profitability, sustainability and survival. Nevertheless, drawing on the upper
echelons theory, we argue that CEOs strategic choices and actions are largely swayed
by their demographic attributes such as age, gender, education, tenure, and nationality,
among others, and these attributes are likely to influence corporate reputation, financial
performance and sustainable growth, either directly or indirectly through organizational
outcomes. For example, younger CEOs, as argued by Hambrick and Mason (1984), tend
to take on greater risks than older ones, which will be reflected in their strategic actions
and, over time, in the organization’s outcomes. Better-educated CEOs, for instance, are
expected to have a greater cognitive ability to process information and to adopt sophis-
ticated systems, which will be reflected in their strategic actions and choices and, in due
course, in the organization’s outcomes (Elsharkawy et al. 2018).
Another theory that is gaining traction in research on the relationship between CEO
characteristics and corporate outcomes is the resource dependence theory (see Kaur
and Singh 2018a; Farag and Mallin 2016). This theory explains “the role and implica-
tions of inter-corporate ownership linkages in managing input–output dependencies”
(McNaughton and Cozzarin 2014, p. 3). The resource dependence theory posits that a
company’s internal environment, including its resources and capabilities, is important
for gaining a competitive advantage (Teece et al. 1997, as cited in Arosa et al. 2013). This
translates to the view that a top management team is a strategic resource for obtaining
and securing the firm’s critical resources (Pfeffer and Salancik 1978). A company can use
their top management team as a vehicle to interact with potential companies with whom
it is interconnected (Pfeffer 1973). This, as a result, can reduce the organization’s reli-
ance on external contingencies (Pfeffer and Salancik 1978), reduce the firm’s uncertainty
(Pfeffer 1973), cut transaction costs (Williamson 1984), and eventually aid in the firm’s
growth and survival (Krause et al. 2016; Nicholson and Kiel 2007; Singh et al. 1986). We
argue that different CEO attributes, viz. gender, education, tenure, nationality, and busy-
ness, among others, bring to the top management team different strategic resources,
such as perspectives, expertise, skills, backgrounds and knowledge, and can thus influ-
ence corporate reputation, financial performance and sustainable growth. For example,
CEOs holding additional positions in other companies are likely to bring to the firms a
wide range of strategic resources, including industry expertise, experience, knowledge
and skills, which can have an impact on corporate outcomes (Harymawan et al. 2019;
Hillman and Dalziel 2003). Hiring overseas CEOs, for instance, may bring in a different
set of information-processing, resource-seeking, legitimacy-building abilities and risk
attributes, which can influence firms’ competitiveness (Sebbas 2017).
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 7 of 50

Furthermore, experience and education, according to Human Capital theory, are the
core human capital an individual possesses (Becker 1975). Education and experience
allow individuals to pile a stock of knowledge, skills and expertise that (Becker 1962),
when ingrained, can constitute valuable, non-imitable, scarce, and non-substitutable
resources which are a potential source of competitive advantage (Barney 1991) and
superior performance for the organization (Altuwaijri and Kalyanaraman 2020; Mukher-
jee and Sen 2019a; Patzelt 2010; Becker 1962). This theory postulates that different top
executives or different personnel may bring to the organization unique human capital,
including different perspectives, backgrounds and experiences, which can prove benefi-
cial for the future development path of the organization (Nielsen and Huse 2010; Hill-
man et al. 2000). The human capital theorists argue that the more skilled and competent
the organization’s personnel, the more likely the organization will attain its strategic
goals and surpass competitors in the near future, maximizing the shareholders’ wealth
(Tumwine et al. 2014; Hitt et al. 1994). Particularly, the human characteristics of top
executives, as argued by Farag and Mallin (2016) and Patzelt (2010), are crucial for the
attainment of desired organizational performance, growth and sustainability since they
are the ones that draw strategic decisions (Hambrick and Mason 1984). Based on human
capital theory, we argue that different demographic attributes of CEO’s, in particular
gender, education, tenure, and nationality bring to the organization different human
capitals, including perspectives, expertise, skills, backgrounds and knowledge, and can
thus influence corporate reputation, financial performance and sustainable growth. For
example, longer-tenured CEOs are likely to bring in human capital including vast experi-
ence and considerable expertise, which can influence organizational performance and
sustainability (Esho and Verhoef 2020; Dong et al. 2007). Female CEOs, for instance,
bring forward unique human capital including new opinions and perspectives, which
can have an impact on corporate outcomes (Nielsen and Huse 2010).
Kaur and Singh (2018a) argued that the agency lens is instrumental for comprehend-
ing the nexus between top-level executives, a firm’s strategic direction, and overall per-
formance. Agents or managers may not always act in the best interest of shareholders’
once the control and ownership are separated (Bonazzi and Islam 2007). This is because
“an individual is self-interested and self-opportunist, rather than altruistic” (Rashid
2010). Agency theory discusses the problems and solutions connected to the delegation
of authority from principals (shareholders) to agents (managers) in the context of con-
flicting interests between the parties (Panda and Leepsa 2017; Linder and Foss 2015).
The theory attempts to align managers’ interests with those of shareholders’ by estab-
lishing a good governance framework tying appropriate incentives and adequate mon-
itoring mechanisms (Berk and Demarzo 2016). This translate to the view that agency
theory gives an idea of what may control the actions and motives of the top-level execu-
tives that, directly or indirectly may have an impact on the firm’s outcomes (Kaur and
Singh 2018a; Panda and Leepsa 2017). Soloman (2007), drawing on agency theory, argue
that CEO attributes such as duality and tenure lead to the fortification of authority and
power which may encourage CEO entrenchment by weakening or lowering the effi-
cacy of the board’s supervision. Unless confined, such a powerful CEO will engage in
self-serving activities or actions that may be detrimental to the owners’ financial well-
being (Elsayed 2007). On the other hand, the stewardship theorists (e.g. Duru et al. 2016;
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 8 of 50

Miller and Sardais 2011; Donaldson and Davis 1991) contend that non-financial factors
such as intrinsic satisfaction from achievement, recognition, respect and reputation
motivate CEOs to maximize corporate value. Therefore, the best stewardship role can
only be executed when the CEO has the authority and power to do so; such a power and
authority a CEO accumulates, only when he serves the company for several years in the
same position (as CEO) or performs a dual role (Schillemans and Bjurstrøm 2020).

Hypotheses
CEO gender
CEO gender has been the theme of several corporate governance-related articles where
the aim is set at determining whether gender has an impact on corporate outcomes. The
resource dependence theory suggests that female executives bring in different knowl-
edge resources, relationship resources and mindset resources which would replenish the
resource deficiency of the top management teams populated completely with male exec-
utives (Zhang et al. 2016). Female executives often offer contrasting opinions, thereby
adding to discussion new dimensions, including more innovative and creative solutions
to complex problems (Ye et al. 2019; Terjsen et al. 2009). Putri and Rusmanto (2019)
argued that although men and women do the same task, their way of handling and fin-
ishing the tasks are quite different. Women have more unwavering and matured emo-
tions (Wani and Masih 2015), are more risk-averse (Farag and Mallin 2016; Croson and
Gneezy 2009; Weber et al. 2002), and are accustomed to multitasking (Ruderman et al.
2002) as compared to men; therefore, female CEO’s are more effective in coordinating,
controlling, and supervising the management, which in turn may improve the firm per-
formance (Adams et al. 2011; Adams and Ferreira 2009). On the other hand, academics
and scholars, for example, Torchia et al. (2018), Adams et al. (2015), and Erhardt et al.
(2003) do hold a completely different notion. They argued that increasing heterogeneity
in top executive teams may impede team communication and collaboration; such situa-
tions could result in a significant increase in the cost of decision-making along with the
risk of conflicts within the top management team, which may weaken corporate perfor-
mance (Zhang et al. 2016).
Empirical studies showed mixed and inconclusive results. For example, Davis et al.
(2010) show that the companies led by female CEOs attain higher market growth and
better financial performance than the companies led by male CEOs. Francoeur et al.
(2008) document that firms’ with female CEOs generate positive abnormal stock returns
in a complex environment. Faccio et al. (2016) indicate that firms run by female CEOs
are characterized by less volatile earnings and higher survivability. Peni and Vähämaa
(2010) discover that female CEOs are more conservative when implementing earning
management activities. Lindeman (2019), Eduardo and Poole (2016), and Khan and
Vieito (2013) find that firms with female CEOs exhibit lower risk levels, and perform
better on average. In contrast, using the US sample, Adams and Ferreira (2009) docu-
ment a significant negative relationship between the proportion of female executives and
corporate performance. Similarly, Singhathep and Pholphirul (2015), Lee and Marvel
(2014), and Amran (2011) observe that the firms led by male CEOs perform better than
the firms led by female CEOs. On the other hand, Kaur and Singh (2018a) document no
significant association between CEO gender and corporate performance, as measured
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 9 of 50

by ROA. In the same line, using Brazilian companies as a sample, Lunkes et al. (2019)
find no link between CEO gender and the financial performance of companies. Using all
the listed Bucharest Stock Exchange companies as a sample, Vintilă et al. (2015) also find
very similar results.
Despite the contradictory evidence presented by the above theoretical and empiri-
cal studies on the costs and benefits of female CEOs, we expect female CEOs to have a
favourable impact on company outcomes. Thus, we propose the following:

• H1a: CEO gender has a positive impact on corporate reputation.

• H1b: CEO gender has a positive impact on corporate financial performance.
• H1c : CEO gender has a positive impact on attaining corporate sustainable growth.

CEO age
The chronological age of the CEO reflects his/her life experience and history (Mouta
and Meneses 2021), and is believed to play a crucial role in the firm’s decision-making
process, and thus in its performance (Tarus and Aime 2014). The existing literature has
highlighted two schools of thought concerning the effect of a CEO’s age on corporate
performance. The first school of thought posits that younger CEOs face higher risks
when making decisions and may avoid radical actions which may hurt corporate per-
formance (e.g. Putri and Rushmanto 2019; Sitthipongpanich and Polsiri 2015; Peni 2014;
Holmström 1999; Zwiebel 1995; Hirshleifer and Thakor 1992; Scharfstein and Stein
1990). They argue that older CEOs are likely to make more rational decisions compared
to younger CEOs, who inevitably have less understanding of the company and less expe-
rience in the business. While the second school of thought put forward more conserv-
atism on the part of older CEOs (e.g. Serfling 2014; Li et al. 2014; Amran et al. 2014;
Robert and Rosenberg 2006; Bertrand and Schoar 2003; Prendergast and Stole 1996;
Hambrick and Mason 1984; Child 1974). They believe that as CEOs get older they tend
to accept less risk; moreover, they are less likely to bring up new ideas, because they are
more conservative. While younger CEOs are usually risk lovers, who are likely to make
bolder decisions and riskier investments, which in turn may bring in superior corporate
performance.
The empirical evidence is mixed. For example, Carter et al. (2010) find that companies
led by older CEOs perform better. Child (1974) documents that the firms led by younger
CEOs exhibit higher return volatility. Peni (2014) noted that older CEOs are associated
with positive firm performance. More recently, Li et al. (2020) also observe very simi-
lar results that CEO age is positively interlinked with the growth and CSR activity of
the firm in China. However, Amran et al. (2014) and Davidson et al. (2007) show that
CEO’s age negatively affects corporate performance, indicating that younger CEOs are
associated with positive firm performance. Bhabra and Zhang (2016) find that the com-
panies led by younger CEOs attain higher average growth than the companies led by
older ones. Using a sample of owner-managed private firms in three Western European
countries, Belenzon et al. (2019) document that as the CEO ages, the firm experiences
lower investment, lower sales growth, and lower profitability. Likewise, many other stud-
ies document very similar results (e.g. Farag and Mallin 2016; Graham et al. 2013; Barker
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 10 of 50

III and Mueller 2002). On the other hand, Lindeman (2019), Educardo and Poole (2016),
and Vintilă et al. (2015) did not find any linkage between the CEO’s age and Corporate
Performance. In the same line, Liu and Jiang (2020) document no significant association
between CEO age and corporate performance in China.
In the context of this study, we expect the negative effect of CEO age to overshadow
any potential positive effects it has. Thus, we propose the following:

• H2a: CEO age has a negative impact on corporate reputation.

• H2b: CEO age has a negative impact on corporate financial performance.
• H2c : CEO age has a negative impact on attaining corporate sustainable growth.

CEO education
Executives with sound educational qualifications provide valuable human capital for a
company (Lunkes et al. 2019). The level of education, to a certain extent, reflects one’s
value system and cognitive preferences (Hambrick 2007). A good level of education has
significance in raising the managers’ prestige hence enabling them to give out optimum
decisions (Certo 2003). Sitthipongpanich and Polsiri (2015) believe executives with
higher levels of education have greater cognitive complexity enabling them to learn and
accept new ideas. In support, Barker III and Mueller (2002) affirm that CEOs with sound
educational backgrounds are less risk-averse and tend to accept new ideas, innovative
changes, and investment opportunities. Moreover, better-educated CEOs have finer
training, substantial cognitive growth, and a wealthy knowledge box that possibly could
shape future corporate performance towards the desired direction by developing their
decision-making and encouraging more strategic action (Wei et al. 2018; Dragoni et al.
2011). This view is supported by many prior empirical studies. For example, using a large
sample of Chinese firms, Lin et al. (2011) find a positive association between CEO’s edu-
cational background and innovation. Barker III and Mueller (2002) observe that CEOs
with an advanced science degree are less risk-averse and more inclined to spend in R&D
activities. More recently, using a Nigerian sample, Saidu (2019) show that the compa-
nies led by well-educated CEOs perform better than the other companies. Ghardallou
et al. (2020) find that the companies with CEOs who possess a postgraduate degree(s)
have much better stock performance. Similarly, Kokeno and Muturi (2016), Wang et al.
(2016), Koyuncu et al. (2010), Jalbert et al. (2010), Warren and Thomas (2005), Rajagopa-
lan and Datta (1996), and Berkeley et al. (1991) document the very similar results. How-
ever, Kaur and Singh (2018a), Morresi (2017), Lindorff and Jonson (2013), Ayaba (2012),
Gottesman and Morey (2010) did not find any noticeable impact of CEO’s education on
corporate performance.
Nevertheless, we believe CEOs with a higher educational background are more knowl-
edgeable and skilful and can provide more innovative and creative solutions. Thus, we
hypothesize:

• H3a: CEO education has a positive impact on corporate reputation.

• H3b: CEO education has a positive impact on corporate financial performance.
• H3c : CEO education has a positive impact on attaining corporate sustainable growth.
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 11 of 50

CEO duality
CEO duality is considered to be an important mechanism of the board control struc-
ture (Bathula 2008). ‘Duality’ represents the situation in which the titles of both
the board chair and CEO go to one individual (Rashid 2010). Simply put, duality is
a board leadership structure in which the CEO wears two hats; one as the CEO of
the firm, the other as chairman of the board of directors (Rechner and Dalton 1991).
Finkelstein and Hambrick (1996) argue that CEO duality is essential for strong firm
leadership and power in managing the firm operations. A CEO with consolidated
power provides more clarity regarding the leadership and direction of the firm, allow-
ing for more productive dealings with external parties (Dalton et al. 1998). Moreover,
the concentration of power in one’s hand, allows firms to make speedier decisions
(Larcker and Tayan 2011) and respond faster to external events (Harris and Helfat
1998); such effective actions and choices tend to improve competitiveness and bring
in superior firm performance (Boyd 1995). On the contrary, Tien et al. (2013) argue
that CEO-chairman duality weakens the board control which in turn adversely affects
the firm’s performance. It is argued when a CEO plays a dual role accumulates enor-
mous power; such accumulation of power is prone to weaken the internal control sys-
tem (Goyal and Park 2002) and reduce the check and balances (Tricker 1994), which
in turn tends to deteriorate the firm performance. However, a few contend that there
is no optimal board leadership structure; both forms of leadership structure may have
potential costs, as well as benefits (Elsayed 2007; Mak and Li 2001; Boyd 1995).
Previous empirical research on CEO duality-corporate performance link documents
a mixed result. For example, Lindeman (2019) and Yang and Zhao (2014) find that
CEO duality is significantly and positively associated with firm performance. Using
the Canadian sample, Gill and Mathur (2011a, 2011b) show that combined leadership
maintains significant positive associations with profitability and the value of the firm.
Taking US firms as a sample, Brickley et al. (1997) observe that duality firms are asso-
ciated with better performance. Likewise, many other studies (e.g. Kota and Tamar
2010; Lin 2005; Tian and Lau 2001; Coles et al. 2001; Boyd et al. 1997; Finkelstein
and D’Aveni 1994) document very similar results, supporting stewardship theory. In
contrast, Azeez (2015) show that separation of CEO and board chairman function
improves firm performance. Using the Sri Lankan sample, Wijethilake and Ekanay-
ake (2019) observe that CEO duality exerts a strong negative influence on enterprise
performance, especially in times the CEO does have additional informal power. In
the same line, the research by Nazar (2016) finds that CEO duality is significantly and
negatively associated with firm performance after controlling the effects of board size,
firm size, and leverage. Several other studies report very similar results (e.g. Wanjiru
2013; Kula 2005; Simpson and Gleason 1999; Rechner and Dalton 1991), supporting
agency theory. On the other hand, Kaur and Singh (2018a) do not find any significant
association between CEO duality and firm performance in India. Similarly, Vintilă
et al. (2015), Rashid (2010), Iyengar and Zampelli (2009), Elsayed (2007), Wan and
Ong (2005), Abdullah (2004), and Judge et al. (2003) observe that there is no notice-
able linkage between duality status and abnormal returns.
Drawing on agency theory, we expect that a combined leadership structure could
influence corporate outcomes adversely. Thus, we propose the following:
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 12 of 50

• H4a: CEO duality has a negative impact on corporate reputation.

• H4b: CEO duality has a negative impact on corporate financial performance.
• H4c : CEO duality has a negative impact on attaining corporate sustainable growth.

CEO Remuneration
The agency theory assumes that “both the owner and the manager are utility maximiz-
ers with different interests” (Capitalism 2009, p.7). When control and ownership are
separated, as argued, a conflict of interest arises between the owners and the managers
(Fama and Jensen 1983; Holmstrom 1979); aligning their interests comes at a cost (Berk
and Demarzo 2016). The agency theorists argue that attractive remuneration to CEO
is an effective governance mechanism that mitigates this conflict of interest, improves
CEOs involvement in achieving the shareholders objective, and consequently improves
the firm’s performance (Raithatha and Haldar 2021; Al-Shammari 2021; Zoghlami 2021;
Smirnova and Zavertiaeva 2017; Kazan 2016). Using expectancy theory of motivation
as a guide, Murphy (1986) put forward that the level of managerial effort depends on
an executive’s incentive contact; the remuneration act as a good stimulus and motivates
the CEO to work in the favour of shareholders and capitulate superior corporate perfor-
mance (Jekins et al. 1998; Vroom 1964). The pay component of the compensation pack-
age may thus be designed in such a way that stimulates the CEO to work in the best
interest of shareholders and discourage risk-taking activities or actions that may put the
firm into problems that adversely affect the firm’s performance (Malik and Shim 2019).
While the stewardship theory suggests that executives are quite aware of the fact that
they have to maximise the wealth of the company’s stockholders, thus they don’t require
enticing pay packages (Zoghlami 2020). Fernandes (2008) and Bebchuk and Fried (2005)
put forward that excessive CEO remuneration would increase the firm expenses unnec-
essarily, and can thus hurt corporate performance.
The empirical evidence to the effect of a CEO’s remuneration on corporate perfor-
mance documents a mixed result. For example, Kaur and Singh (2018a) and Murphy
(1985) find that CEO remuneration is associated with positive corporate performance.
Using a large sample of European companies, Smirnova and Zavertiaeva (2017) observe
that there is a significant and positive relationship between CEO compensation and cor-
porate performance measured by ROA and the Sharp index. Consistent with the stud-
ies, Sigler (2011) noted that CEO’s remuneration and ROE are positively associated.
Matousek and Tzeremes (2016) show that with an increase of one per cent in CEO pay,
increases by around ten per cent of the firm’s value. Interestingly, Schulz and Flickinger
(2018) find a weak positive association between overpayment in total compensation and
a firm’s reputation, while overpayment in stock options appears to have a significant and
negative impact on corporate reputation. While Brick et al. (2006) document that there
is a strong negative relation between CEO remuneration and corporate performance.
Using a sample of non-financial firms listed in the KSE, Ejaz et al. (2019) show a sig-
nificant and negative relationship between CEO compensation and corporate financial
performance measured by Tobin’s Q and EPS. Similarly, Cooper et al. (2014) and Mal-
mendier and Tate (2009) find very similar results. On the other hand, Ozkan (2011),
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 13 of 50

Tosi et al. (2000), Finkelstein and Boyd (1998) did not find any significant relationship
between CEOs remuneration and corporate performance.
Drawing on agency theory and expectancy theory of motivation, we expect that higher
CEO remuneration would enhance CEO productivity and improve corporate perfor-
mance. Thus, we hypothesize the following:

• H5a: CEO remuneration has a positive impact on corporate reputation.

• H5b: CEO remuneration has a positive impact on corporate financial performance.
• H5c : CEO remuneration has a positive impact on attaining corporate sustainable
growth.

CEO tenure
The term of office/tenure is defined as the length of time a person occupies a position as
a leader in an organization (Fujianti 2018). In particular, organization tenure is recog-
nized as an indicator of experience in a particular job within an organization (Herri et al.
2017). Long-serving CEOs, according to Chen (2011), bring to the top management
team more stability, efficiency, lower conflict, and better interpersonal communication,
leading to social cohesiveness and shared social knowledge. In addition, they may have
also built stronger social and business connections, which might help in solving complex
problems linked to knowledge and technology, as well as capital accumulation (Wei et al.
2018; Vintila et al. 2015). Also, as longer-tenured CEOs possess more experience and
knowledge of the business environment and corporate activities, they are more likely
to make rational decisions than shorter-tenured CEOs (Shakir 2009). Longer-tenured
CEOs, as argued by Zelechowski and Bilimoria (2006) are much familiar with the firm’s
resources and methods of operation, thereby likely to provide more informed direction
and guidance, which may bring in better corporate performance. Afthanorhan et al.
(2019), on the other hand, argue that the longer the CEO tenure, the more established
the CEO become and the more undue influence they exert over the corporate board.
Unless restricted, such a powerful CEO will undertake self-serving activities that could
be detrimental to the economic welfare of the principal, moreover, may adversely affect
corporate performance as a whole (Elsayed 2007).
The empirical evidence for the effect of a CEO’s tenure on corporate performance doc-
uments a mixed result. For example, Van Ness et al. (2010) show that the average term of
office of the executives has a positive and significant impact on company performance.
Garcia-Blandon et al. (2019), Lindeman (2019), Mohamed et al. (2015), and Peni (2014)
find that CEO’s tenure is associated with positive corporate performance. Consistent
with the studies, Anna et al. (2016) document that the CEO’s term of office has a sig-
nificant positive effect on corporate performance measured by ROE, ROA, and Tobin’s
Q. Using all the listed Bucharest Stock Exchange companies as a sample, Vintilă et al.
(2015) observe that CEO tenure positively influences firm value measured by Tobin’s Q.
However, Hamori and Koyuncu (2015) find that CEO’s tenure is associated with nega-
tive corporate performance. Likewise, Han et al. (2017) find that the CEO’s term of office
has a significant negative effect on corporate cash holding. Using data from four Latin
American countries from 2004 to 2014, Briano-Turrent et al. (2020) observe that CEO
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 14 of 50

tenure has a consistent and significant negative effect on the dividend payout. On the
other hand, Tien et al. (2013) did not find any significant association between CEOs ten-
ure and corporate performance.
In the context of this study, we expect the positive effect of CEO tenure to outshine
any negative effects it has. Thus, we propose the following:

• H6a: CEO tenure has a positive impact on corporate reputation.

• H6b: CEO tenure has a positive impact on corporate financial performance.
• H6c : CEO tenure has a positive impact on attaining corporate sustainable growth.

CEO nationality
Nationality is often viewed as a proxy to intercultural competence (Gibson 2014, as cited
in Sebbas 2017), which has made it increasingly common for boards to hire foreigners
to the top management (Sebbas 2017). In this context, however, the legitimate concern
is: why do firms hire foreign CEOs? Are there some desirable features that make them
special from the rest?
Le and Kroll (2017) argue that foreign CEOs hold more knowledge about international
markets and regulations, in particular about foreign customers, competitors, culture,
and employees, and can thus help the company face fewer uncertainties and ambiguities
when entering the international market. Furthermore, foreign CEOs may have studied
the language of that country, which can make contracting and negotiating with potential
business partners easier (Patzelt 2010). International CEOs may also have developed a
social network in their previous host country, which might aid in the search for foreign
business partners (Herrmann and Datta 2005). These various benefits attached to inter-
national CEOs can add competitive advantage and facilitate firms to improve their per-
formance (Peng et al. 2015; Carter et al. 2010). This view is in line with prior empirical
studies that show that foreign CEOs are associated with positive firm performance (e.g.
Badru and Raji 2016; Ujunwa 2012), supporting resource dependence theory and human
capital theory.
There are, however, strong contradicting views in the literature, regarding this.
Elsharkawy et al. (2018) argue that overseas CEOs may lack the necessary experience to
deal with a substantially closed domestic market, and can thus hardly make any contri-
bution to the decision-making process. Supporting this view, Masulis et al. (2012) put
forward that foreign CEOs are not well acquainted with the national rules and regula-
tions, and normal indigenous methods of management; as a result, may hurt the firm
performance. This view is supported by previous studies that confirm that foreign CEOs
are associated with negative firm performance (e.g. Kaur and Singh 2018a; Elsharkawy
et al. 2018; García-Meca et al. 2015). On the other hand, Vintilă et al. (2015) did not find
any significant linkage between CEO nationality and firm value measured by Tobin’s Q.
Based on resource dependence theory and human capital theory, we argue that inter-
national CEOs bring in unique resources and human capital, which could help the
firm to make better decisions to address complicated problems. Thus, we propose the
following:
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 15 of 50

• H7a: CEO nationality has a positive impact on corporate reputation.

• H7b: CEO nationality has a positive impact on corporate financial performance.
• H7c : CEO nationality has a positive impact on attaining corporate sustainable
growth.

CEO busyness
CEO busyness represents a situation whereby the CEO represents the board of other
companies (Wu and Bruno 2008). To put it differently, busyness refers to a situation
whereby the CEO holds multiple directorships at a time. Mendez et al. (2017) and Tien
et al. (2013) argue that CEOs with multiple directorships are expected to help companies
towards better performance due to their reputation (Fama and Jensen 1983), expertise
and experience (Fich 2005). In addition, their strong outside connections can help an
organization to collect necessary resources for the effective running of a business (Booth
and Deli 1996). Pandey et al. (2015), on the other hand, argues that firms with better
growth opportunities should be managed by less busy CEOs. Busyness causes the CEOs
to not have enough time and energy to focus on the main tasks in managing the com-
panies (Harymawan et al. 2019); they often tend to miss more board meetings (Jiraporn
et al. 2009). This lack of commitment on their part may hurt the strategic choices and
actions of the top management and end up with losing too many potential business
opportunities (Ahn et al. 2010; Core et al. 1999). This view is in agreement with existing
research on the busy CEO. For example, Harymawan et al. (2019) find those busy CEOs
are associated with lower firm performance in Indonesia. Using companies listed in the
Bombay Stock Exchange, Pandey et al. (2015) observe that the effect of CEO busyness on
corporate performance measured by Tobin’s Q is negative. Likewise, Falato et al. (2014)
and Cashman et al. (2012) reports very similar results, contradicting resource depend-
ence theory. These arguments shed light on the fact that CEOs with multiple director-
ships are associated with negative firm performance.
Based on the above facts and figures, we hypothesize the following:

• H8a: CEO busyness has a negative impact on corporate reputation.

• H8b: CEO busyness has a negative impact on corporate financial performance.
• H8c : CEO busyness has a negative impact on attaining corporate sustainable growth.

Research design
Data
Following Mukherjee and Sen (2019a, 2019b), a sample of NSE listed leading 200 com-
panies have been selected from the target population based on their market capitaliza-
tion. This selection is expected to capture a comprehensive view of the best blue-chip
companies along with the mid-cap companies in India. Moreover, this selection mini-
mizes the sectoral biasness to a great extent. Of the selected primary sample, 138 non-
financial companies are retained and have been considered as an ultimate sample size
based on purposive sampling. In line with other studies (e.g. Garcia-Meca and Palacio
2018; Farag and Mallin 2016), banks and other financial companies have been left out of
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 16 of 50

the ultimate sample size owing to the divergent nature of the operation and the capital
structure. In addition, a few non-financial companies, due to the unavailability of data or
unusual financial years, failed to be part of our final sample size. The required data of the
selected companies, viz. financial and CEO specific attributes have been collected from
the Capitaline and CMIE database over eight years, i.e., from 2010 to 2017. The selec-
tion of the said period has been made with a deliberate intent to evade the effects of the
2008–2009 global financial crises (see Mukherjee and Sen 2019a, 2019b). A summary of
the sample selection process is shown in Table 1.

Model
Principally, this study applies three regression models. To test the hypotheses, viz.
H1a , H2a , H3a , H4a , H5a , H6a , H7a , andH 8a , model (1) is used. We expect the coefficient
on CGEN, CEDU, CTEN, CNAT, and CREM to be positive. While the coefficient on
CAGE, CDUA, and CBUS is expected to be negative.

REP it =α1 + β2 CGENit + β3 CAGEit + β4 CEDU it

+ β5 CDUAit + β6 CREMit + β7 CTEN it
+ β8 CNAT it + β9 CBUS it + β10 LEV it
+ β11 FS it + β12 TAN it + β13 PRODit + µit Model (1)

The hypotheses H1b , H2b , H3b , H4b , H5b , H6b , H7b , andH 8b are tested using model (2).
We expect the coefficient on CGEN, CEDU, CTEN, CNAT, and CREM to be positive.
While the coefficient on CAGE, CDUA, and CBUS is expected to be negative.
CFP it = α1 +β2 CGENit +β3 CAGEit + β4 CEDU it + β5 CDUAit + β6 CREMit + β 7 CTEN it +
β8 CNAT it + β9 CBUS it + β10 LEV it + β11 FS it + β12 TAN it + β13 PRODit + µit
Model (2).
To test the hypotheses, viz. H1c , H2c , H3c , H4c , H5c , H6c , H7c , andH 8c , model (3) is used.
We expect the coefficient on CGEN, CEDU, CTEN, CNAT, and CREM to be positive.
While the coefficient on CAGE, CDUA, and CBUS is expected to be negative.

CSG it =α1 + β2 CGENit + β3 CAGEit + β4 CEDU it

+ β5 CDUAit + β6 CREMit + β7 CTEN it + β8 CNAT it
+ β9 CBUS it + β10 LEV it + β11 FS it + β12 TAN it
+ β13 PRODit + µit Model (3)

The aforementioned equations have been written based on the one-way fixed-effect
model. Where REP is corporate reputation; CFP is corporate financial performance; CSG
denotes corporate sustainable growth; CGEN is CEO gender; CAGE represents CEO

Table 1 Sample selection. Source: Authors’ own tabulation

Particulars No. of
companies

Top NSE listed companies 200

Less: Banks and other financial companies 39
Less: Non-financial companies with missing data or unusual financial year 23
Final Sample 138
138 firms × 8 years = 1,104 firm-year observations
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 17 of 50

age; CEDU denotes CEO education; CDUA is CEO duality; CREM is CEO remunera-
tion; CTEN is CEO tenure; CNAT represents CEO nationality; CBUS is CEO busyness;
LEV is leverage; FS denotes firm size; TAN represents tangibility; PROD is productivity;
i (i.e., company) = 1, 2, 3, 4, 5……138; t (i.e., time) = 1, 2, 3…………0.8; β2 , β3 . . . ..β9 rep-
resents the coefficient of explanatory variables, and µ is the error term. In the case of the
random-effect model, µ will be substituted by ɷ, other components of the model remain
the same. ɷ represents the composite error term which consists of two components, viz.
ε and µ; whereε represents the cross-section error component and µ is the combined
time series and cross-section error component. While in the case of the pooled-OLS
model, the entire equation remains the same except the constant termα1, which will be
substituted byα0. The definition and measurement of all the variables are provided in
Table 2. The models have been examined utilizing STATA package version 13.1 in this
study.

Table 2 Variable definitions. Source: Authors’ own tabulation

Variables Definitions

1. Dependent Variable:
  Corporate Reputation (REP) Firm age = Number of completed financial years since the company was
incorporated (Sahudin et al., 2011; Padron et al., 2005; Datta et al., 1999)
  Firm Performance (CFP) Firm performance has been quantified by ROA, a widely accepted,
accounting-based performance measure (Saidu, 2019; Kaur & Singh, 2018a;
Weng & Chen, 2017; Veprauskaite & Adams, 2013; Bhagat & Bolton, 2008;
Tosi et al., 2004). Mathematically, consistent with Pandey (2015), Amran
et al. (2014), Veprauskaite & Adams (2013), Gibson (2013), ROA is computed
as follows:
ROA = NetincomebeforeInterestandTaxesduringperiodt
Totalassetsattheendofperiodt
  Corporate Sustainable Growth Sustainable Growth Rate (SGR) = Profit margin x Retention rate x Asset
(CSG) Turnover Ratio x Asset to Equity (Higgins, R.C., 2013, p. 126)
2. Independent Variable(s):
  CEO Attributes -
  CEO Gender (CGEN) Coded ‘1’, if the CEO is a female and coded ‘0’, otherwise (Kaur & Singh,
2018a)
  CEO Age (CAGE) Age of CEO at period t (Kokeno & Muturi, 2016)
  CEO Education (CEDU) Coded ‘1’, if the CEO possesses a Postgraduate degree or Professional
degree or PhD or any other equivalent degree and ‘0’ otherwise (Saidu,
2019; Kaur & Singh, 2018a; Singla, 2016; Darmadi, 2013; Ujunwa, 2012)
  CEO Duality (CDUA) Coded ‘1’, if the examined individual acts simultaneously as the CEO and
the board’s chairman at period t and coded ‘0’, otherwise (Mukherjee &
Sen, 2019b; Kaur & Singh, 2018a; Singla, 2016)
  CEO Remuneration (CREM) Natural log of CEO’s total annual compensation at period t
  CEO Tenure (CTEN) Coded ‘1’, if the examined individual had served the company for more
than 5 years as CEO and coded ‘0’, otherwise (Harymawan et al., 2019)
  CEO Nationality (CNAT) Coded ‘1’, if the CEO is from a foreign nation and coded ‘0’, otherwise (Kaur
& Singh, 2018a)
  CEO Busyness (CBUS) Coded ‘1’, if the CEO holds more than one directorship at a time and coded
‘0’, otherwise (Fich & Shivdasani, 2006; Ferris et al., 2003; Core et al., 1999)
3. Control Variable(s):
  Leverage (LEV) Total debt to total equity (Saidu, 2019; Mukherjee & Sen, 2019b)
  Firm Size (FS) Natural log of firm’s total assets at period t (Harymawan et al., 2019; Saidu,
2019; Mukherjee & Sen, 2019b; Kaur & Singh, 2018a; Weng & Chen, 2017)
  Tangibility (TAN) Tangible assets to total assets ratio (Arilyn & Beny, 2019)
  Productivity (PROD) Sales to Total Assets Ratio (Basuki & Kusumawardhani, 2012)
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 18 of 50

The above econometric models are investigated by using the static panel data tech-
nique. In investigating the relationship between the attributes of CEO and corporate
outcomes, different statistical techniques, for instance, multiple regression (see Saidat
et al. 2020; Belenzon et al. 2019; Ayaba 2012; Jalbert et al. 2010), logit regression (see
Tran and Pham 2020), quantile regression (see Liu and Jiang 2020), and ordinary least
square regression (see Martino et al. 2020; Altuwaijri and Kalyanaraman 2020; Liu and
Jiang 2020; Saidu 2019; Elsharkawy et al. 2018; Li and Singal 2017; Gill and Mathur
2011a), among others have been used in prior studies. We relied on the static panel
data technique, similar to Kaur and Singh (2020, 2018a), because this technique eradi-
cates the shortcomings of cross-section and time-series, improving the consistency and
explanatory power (Petersen 2009). Moreover, the technique, in particular fixed-effects
regression model handles the issue of omitted variables, tackling the endogeneity bias to
some extent (Arora and Sharma 2016).
To test the alternatives of panel data (i.e., fixed and random effects, respectively)
against the pooled regression, the F-test (Baltagi 1995), and the Breusch and Pagan
(1980) LM test are performed (Elsayed and Wahba 2016). The results (unreported)
are significant for both these tests, which suggest using the panel data model. At this
juncture, Hausman’s (1978) specification test is carried out to determine whether the
fixed effects model or the random effect model should be employed (Baltagi 1995). The
estimates (unreported) of the Hausman test point in favour of the fixed effects model;
accordingly, the fixed effects model is retained and being employed to test the hypoth-
eses of this study.

Variables
Dependent variable
For the accomplishment of the objective, we employed three dependent variables. Our
first dependent variable is corporate reputation. Following previous research (e.g. Sahu-
din et al. 2011; Padron et al. 2005; Datta et al. 1999), this variable has been proxied by
using firm age. According to Kaur and Singh (2018b)—“Stakeholders tend to be more
familiar about an old firm and hence such firms are expected to be better known to the
public than a newly established organization” (p. 54). Moreover, older firms build up
relations with the stakeholders gradually over some time and eventually gain more sup-
port from them in all aspects, thereby a good reputation develops for an old firm (Weng
and Chen 2017; Loderer et al. 2013). The following formula has been used to measure
corporate reputation:

FA = CY − IY

where, FA = Firm Age, CY = Current Year, IY = Incorporation Year of the Company.

Our next dependent variable is corporate financial performance. We measure cor-
porate financial performance using Return on Assets (ROA), an accounting-based per-
formance measure. As cited by Amran et al. (2014), the use of ROA as a performance
measure is more preferable compared to other accounting measures (ROE, EPS) because
the operating income used to calculate ROA is not influenced by special charges and
is also susceptible to manipulation by managers (Bushman and Smith 2001). Consist-
ent with Pandey (2015), Veprauskaite and Adams (2013), Gibson (2013), Rashid (2010),
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 19 of 50

Yammeesri et al. (2006), ROA is calculated as the net income before interest and taxes
scaled by the book value of total assets.
Corporate sustainable growth is our very last dependent variable. From a core finan-
cial standpoint, corporate sustainable growth represents ‘an affordable growth that can
be sustained profitably for future benefits.’ More precisely, corporate sustainable growth
can be interpreted as the maximum growth that can be attained without having finan-
cial, structural or strategic setbacks (Ali et al. 2014; Jafri et al. 2014; Ismail et al. 2012).
Overtimes, different scholars have used different metrics to quantify corporate sustain-
able growth such as the simple growth model (see Alayemi and Akintoye 2015), Ross,
Westerfield, and Jordan’s model (see Mukherjee and Sen 2018), and Zakon’s model (see
Amouzesh et al. 2011), among others. However, amongst those, sustainable growth rate
(SGR) models of Higgins and Van Horne are universally accepted and used in several
previous empirical pieces of research (e.g. Ocak and Findik 2019; Xu and Wang 2018;
Pandit and Tejani 2011; Lockwood and Prombutr 2010; Shui-ying and Ying-yu 2008),
including a very recent study by Ain et al. (2021). It’s worth noting, however, that there is
no significant difference as such between these two models and both of these are evenly
suitable for the managers and researchers for their study (Fonseka et al. 2012). Thus, in
the present study, Higgins’s SGR model has been employed as a measure of corporate
sustainable growth. The formula of the sustainable growth rate can be expressed as (see
Higgins 2013, p. 126):

R × Earnings
SGR = (1)
Eq 0

where SGR represents the sustainable growth rate; R is the firm’s retention rate, calcu-
lated as 1 minus the dividend payout ratio;Eq 0 denotes beginning-of-period equity.
By rearrangement, Eq. (1) can be expressed as:

SGR = R × ROE0 (2)

where ROE0 is the firm’s return on equity. Finally, we can rewrite Eq. (2) yet again as:

SGR = P × R × A × T̂ (3)

where P is the profit margin, calculated as net income scaled by the sales; A is the asset
turnover ratio, calculated as sales scaled by the total assets; T̂ is the asset to Equity ratio,
measured as total assets scaled by the beginning-of-period equity.

Independent variables
Following previous empirical research (e.g. Harymawan et al. 2019; Saidu 2019; Kaur and
Singh 2018a; Chen et al. 2018; Kokeno and Muturi 2016; Amran et al. 2014; Mohamed
et al. 2014; Veprauskaite and Adams 2013; Darmadi 2013; Ujunwa 2012; Fich and Shiv-
dasani 2006; Tosi et al. 2004), an array of eight variables that represents CEO traits, is
considered in this study as independent variables. First, CEO Gender, as measured by
dummy variable ‘0’ and ‘1’, i.e., coded ‘1’, if the CEO is a female and coded ‘0’, otherwise.
Second, CEO Age, as measured by age of CEO at period t. Third, CEO Education, by
dummy variable ‘0’ and ‘1’, i.e., coded ‘1’, if the CEO possesses Postgraduate degree(s)
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 20 of 50

Table 3 Descriptive Statistics. Source: Authors’ own tabulation using STATA software (version 13.1)
Variables Obs Mean Std. Dev Min Max

REP 1104 39.663 24.287 2.000 121.000

CFP 1104 0.138 0.122 − 0.840 1.264
CSG 1104 0.166 0.371 − 3.211 8.461
CGEN 1104 0.037 0.189 0.000 1.000
CAGE 1104 55.533 8.399 22.000 96.000
CEDU 1104 0.822 0.383 0.000 1.000
CDUA 1104 0.439 0.497 0.000 1.000
CREM 1104 16.355 3.354 0.000 21.227
CTEN 1104 0.504 0.500 0.000 1.000
CNAT 1104 0.022 0.146 0.000 1.000
CBUS 1104 0.645 0.479 0.000 1.000
LEV 1104 1.257 4.906 − 44.440 114.095
FS 1104 9.173 1.488 0.615 13.333
TAN 1104 0.619 0.211 0.005 0.961
PROD 1104 0.848 0.651 0.001 6.908
This table presents the descriptive statistics for variables employed in this study. The definition and measurement of all the
variables are provided in Table 2

or Postgraduate diploma(s) or Professional degree(s) or PhD or any other equivalent

degree(s) and ‘0’ otherwise. Fourth, CEO Duality, as measured by dummy variable ‘0’
and ‘1’, i.e., coded ‘1’, if the examined individual acts simultaneously as the CEO and
the board’s chairman at period t and coded ‘0’, otherwise. Fifth, CEO Remuneration,
as measured by the natural log of CEO’s total annual compensation at period t. Sixth,
CEO Tenure, as measured by dummy variable ‘0’ and ‘1’, i.e., coded ‘1’, if the CEO has
served the company for more than 5 years in the same position and coded ‘0’, other-
wise. Seventh, CEO Nationality, as measured by dummy variable ‘0’ and ‘1’, i.e., coded ‘1’,
if the CEO is from a foreign nation and coded ‘0’, otherwise. Lastly, CEO Busyness, as
measured by dummy variable ‘0’ and ‘1’, i.e., coded ‘1’, if the CEO holds more than one
directorship at a time and coded ‘0’, otherwise. These selected attribute variables portray
demographic (gender, age, education level, tenure and nationality) and job-specific fac-
tors (duality, remuneration and busyness).

Control variables
To account for alternative factors that may influence our dependent variables, namely
corporate reputation, financial performance, corporate sustainable growth, we con-
trolled for certain firm-specific variables as suggested by previous research (e.g. Musah
et al. 2019; Krekel et al. 2019; Kaur and Singh 2018a; Ernestine and Setyaningrum 2018;
Arman et al. 2014; Ayaba 2012). To be more specific, we controlled four firm-specific
variables, namely leverage, as measured by total debt to equity ratio, firm size, as meas-
ured by the natural log of firm’s total assets, tangibility, as measured by tangible assets to
total assets ratio, and productivity, as measured by sales to total assets ratio.
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 21 of 50

Table 4 Panel Unit-Root Test. Source: Authors’ own tabulation using STATA software (version 13.1)
Variables No. of Panels No. of Periods Test Category
First Generation Second Generation

Adj. t-statistic t-bar

REP 138 8 −16.275∗ −1.951∗
CFP 138 8 −19.122∗ −2.373∗
∗
CSG 138 8 −1.5e + 02 −2.827∗
CGEN 138 8 NA NA
CAGE 138 8 −10.942∗ −1.924∗∗
CEDU 138 8 NA NA
CDUA 138 8 NA NA
CREM 138 8 −3.2e + 03∗ −2.264∗
CTEN 138 8 NA NA
CNAT 138 8 NA NA
CBUS 138 8 NA NA
LEV 138 8 −46.017∗ −2.611∗
FS 138 8 −12.075∗ −1.929∗∗
∗
TAN 138 8 −14.282 −1.924∗∗
∗
PROD 138 8 −43.789 −1.873∗∗
This table presents the results of the panel unit-root tests for the studied variables. The definition and measurement of
all the variables are provided in Table 2. * and ** indicate statistical significance at the 1% and 5% levels, respectively. ‘NA’
denotes not applicable

Results

Descriptive statistics
Table 3 reports the descriptive statistics for all dependent, explanatory and control vari-
ables used in this study. The number of firm-year observations is 1104 for each vari-
able. The mean value of REP is 39.663 with a maximum of 121.000 and a minimum of
2.000. The mean CFP is just under 0.14 (min =—0.840, max = 1.264), which is higher
than that reported in Kaur and Singh (2018a). Considering CSG, the mean value is just
under 0.170 (min =—3.211, max = 8.461), which is higher than that reported in Ocak
and Findik (2019) and Xu and Wang (2018). The statistics for CEO gender indicate that
approximately 4% of firm-year observations have female CEOs. The average age of CEOs
is 56 years, and notably, 82% of firm-year observations have highly qualified/well-edu-
cated CEOs (possesses Postgraduate degree or Professional degree or PhD or any other
equivalent degree). On average, 44% of firm-year cases have dual CEO-Chair roles. This
figure is higher than that reported in the Indian corporate sector by Kaur and Singh
(2018a). The average remuneration of CEOs is ₹ 53.238 million with a standard deviation
of ₹ 111. 87 million (unreported). The statistics for CEO tenure indicate that around 50%
of firm-year cases have long-tenured CEOs (served more than 5 years in the company as
CEO). Table 3 further shows that in 2% of firm-year cases the CEOs are foreigners. This
figure accords with Kaur and Singh (2018a) which cite that 1.9% of firm-year observa-
tions have foreign CEOs. The mean CBUS is nearly 0.65 (Std. Dev. = 0.479), indicating
that in 65% of firm-year cases the CEOs are busy (holds more than one directorship at a
time).
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 22 of 50

In terms of the firm-specific variables, the statistics for leverage (mean = 1.257) and
firm size (mean = 9.173) indicate that the selected companies are well-established and
uphold a high-geared capital structure. The mean value of TAN is 0.619 with a maxi-
mum of 0.961 and a minimum of 0.005. The statistics for productivity suggest that the
selected companies have succeeded to generate nearly, 85% of their sales through the use
of the assets.

Panel unit‑root test

Table 4 presents the results of the panel unit-root tests for the variables employed in this
study. Initially, following previous researches (e.g. Khan et al. 2021; Nyeadi et al. 2018;
Paul and Mitra 2018, Zerihun and Breitenbach 2017), we applied Levin–Lin–Chu (2002)
test—a conventional approach to examine whether data series are stationary at level. The
estimates show that all dependent variables, explanatory variables and selected control
variables are stationary at their levels at the 1% level of significance. This indicates the
employed dependent, explanatory and control variables have no unit root.
In conjunction, following Koç and Şenol (2020), the Pesaran (2007) test—a second-
generation approach to panel unit root testing has been adopted. The first generation
of panel unit root tests including the Levin-Lin-Chu (2002) test is based on the cross-
sectional independency hypothesis. The assumption of cross-sectional independence
is perhaps relatively restrictive and somewhat unrealistic in certain macroeconomic
applications (Gengenbach et al. 2009). It is also likely that our data series might have the
issue of cross-sectional dependence as the attributes are being studied. In such a case,
the underlying premise of the first generation of tests does not hold. The new category
of tests to what we call the second generation of panel unit root tests relax the cross-
sectional independence assumption and allow for cross-sectional correlations (Burdisso
and Sangiácomo 2016; Hurlin and Mignon 2007). The results of the Pesaran (2007) test
are reported in Table 4. The results show that all dependent variables, explanatory vari-
ables and selected control variables are stationary at their levels either at the 1% level
or 5% level of significance, echoing those obtained from Levin-Lin-Chu (2002) test esti-
mates. This reaffirms that the employed variables have no unit root. It’s worth noting
that the central idea behind testing for unit-root is to check whether the series is mean-
reverting. Therefore, testing for unit-root on binary variables, such as CGEN, CEDU,
CDUA, CTEN, CNAT and CBUS (as employed in this study) might not be necessary,
as these variables are not ordered in time, and as such may not suffer from time-series
issues.

Correlation analysis
Table 5 reports the Pearson correlation among variables employed in this study. The cor-
relation coefficient of CEO gender with corporate financial performance is significantly
positive. In contrast, CEO age is significantly and negatively correlated with corporate
reputation, corporate financial performance, and corporate sustainable growth. The
next manifest variable, CEO education is significantly and positively correlated with cor-
porate reputation and corporate financial performance, while CEO duality does seem
to be significantly and negatively correlated to corporate financial performance. The
 Mukherjee and Sen Financial Innovation

Table 5 Correlation matrix. Source: Authors’ own tabulation using STATA software (version 13.1)
REP CFP CSG CGEN CAGE CEDU CDUA CREM CTEN CNAT CBUS LEV FS TAN PROD VIF

REP 1
CFP 0.110∗ 1
(2022) 8:40

CSG − 0.010 0.370∗ 1

CGEN − 0.007 0.084∗ − 0.007 1 1.082
CAGE −0.237∗ −0.099∗ −0.096∗ 0.005 1 1.159
CEDU 0.106∗ 0.088∗ 0.031 0.054 −0.130∗ 1 1.162
CDUA 0.007 −0.166∗ − 0.045 − 0.048 0.263∗ − 0.007 1 1.229
∗ ∗ ∗
CREM 0.188 0.215 0.055 −0.168 − 0.024 0.204∗ −0.134∗ 1 1.169
CTEN 0.124∗ − 0.026 0.058∗∗ 0.032 0.217∗ −0.174∗ 0.160∗ 0.072∗ 1 1.301
CNAT − 0.121 − 0.054 − 0.030 0.069∗∗ 0.026 −0.060∗∗ −0.107∗ − 0.009 −0.088∗ 1 1.068
∗ ∗ ∗ ∗ ∗
CBUS −0.021 −0.220 − 0.007 0.086 0.153 0.020 0.153 0.009 0.180∗ − 0.032 1 1.150
LEV − 0.026 −0.112∗ 0.006 − 0.007 0.012 0.038 0.030 − 0.029 0.072∗ − 0.006 0.041 1 1.020
∗ ∗ ∗ ∗ ∗ ∗ ∗ ∗
FS 0.248 0.202 0.079 −0.114 0.094 0.217 0.192 0.112 −0.264∗ 0.106∗ 0.185∗ 0.031 1 1.493
TAN − 0.022 −0.227∗ −0.096∗ 0.022 0.080∗ − 0.024 − 0.001 − 0.042 − 0.018 0.117∗ 0.168∗ −0.063∗∗ 0.244∗ 1 1.220
PROD 0.110∗ 0.343∗ 0.082∗ 0.048 − 0.028 − 0.010 −0.161∗ 0.092∗ 0.010 0.035 − 0.054 0.004 −0.301∗ −0.330∗ 1 1.249
This table reports the Pearson correlation among variables used in the present study. The definition and measurement of all the variables are provided in Table 2. * and ** indicate statistical significance at the 1% and 5%
levels, respectively
Page 23 of 50
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 24 of 50

correlation coefficients of CEO remuneration with corporate reputation and corporate

financial performance are significantly and positively correlated. Similarly, the correla-
tion coefficients of CEO tenure with corporate reputation and corporate sustainable
growth are significantly and positively correlated. The correlations between the CEO
nationality and studied dependent variables, viz. corporate reputation, corporate finan-
cial performance, and corporate sustainable growth are in the predicted direction, but
insignificant. On the contrary, CEO busyness is significantly and negatively correlated
with corporate reputation and corporate financial performance. In terms of the control
variables, leverage is significantly and negatively correlated with corporate financial per-
formance. On the other hand, firm size is significantly and positively correlated with cor-
porate reputation, corporate financial performance, and corporate sustainable growth.
The correlation coefficients of tangibility with corporate financial performance and
corporate sustainable growth are significantly negative. On the contrary, productivity is
significantly and positively correlated with corporate reputation, corporate financial per-
formance, and corporate sustainable growth.
In addition, Table 5 shows that correlations between explanatory variables are low,
ranging from a minimum of 0.001 to a maximum of 0.330 (below 0.80) (see Gujarati
1995); moreover, the maximum variance inflation factor (VIF) values for the explanatory
variables are within the acceptable threshold of 10 (see Hair et al. 1995). These estimates
allow us to rule out the potential existence of multicollinearity amid the explanatory var-
iables in the studied models, and its aftermath on the regression analysis.

Hypotheses testing
The hypotheses testing segment is bifurcated into three sections: the first section
explores the impact of selected demographic and job-specific attributes of CEO on cor-
porate reputation. The second section explores the impact of selected demographic and
job-specific attributes of CEO on corporate financial performance. The third section
explores the impact of selected demographic and job-specific attributes of CEO on cor-
porate sustainable growth. After controlling for several firm-specific variables from the
regression analyses, Table 6 show evidence of H1a − H8a , H1b − H8b, and H1c − H8c as in
model (1), model (2), and model (3), respectively.
Table 6 presents the fixed-effects regression results for the baseline models, viz.
model (1), model (2), and model (3) employed in this study. The estimates of the Haus-
man (1978) test (unreported) confirmed that the application of a fixed-effect model is
preferable compared to the random-effect model. The coefficient on CEO gender in
model (1) is insignificant (β = −0.202; S.E. = 0.546), suggesting that CEO gender has
no measurable impact on stakeholder perception of firm reputation. Thus, hypothesis
1(a) is not supported. Likewise, CEO age has proven not to be significantly associated
with a corporate reputation (β = −0.311; S.E. = 0.191); accordingly, we find no sup-
port for hypothesis 2(a). The next manifest variable, CEO education also demonstrates
no notable association with the corporate reputation (β = −0.187; S.E. = 0.468), indi-
cating that CEOs advanced education (possessing a Postgraduate degree or Professional
degree or PhD or any other equivalent degree) does not affect stakeholder perception
of firm reputation. Thus, we fail to find support for hypothesis 3(a). While the result
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 25 of 50

Table 6 Estimation results for baseline models. Source: Authors’ own tabulation using STATA
software (version 13.1)
Variable Corporate Reputation Corporate Financial Corporate
Performance Sustainable
Growth
Model (1) Model (2) Model (3)
∗ ∗∗
Constant −1.877 0.183 0.414∗
(0.068) (0.080) (0.128)
CGEN − 0.202 0.042∗∗ −0.054
(0.546) (0.022) (0.115)
CAGE − 0.311 − 0.000 −0.006∗
(0.191) (0.003) (0.002)
CEDU -0.187 0.033 0.028
(0.468) (0.019) (0.034)
CDUA −0.506∗∗ 0.006 0.018
(0.092) (0.010) (0.061)
CREM 0.370∗ 0.007∗ 0.012
(0.059) (0.002) (0.003)
CTEN 0.037∗ 0.008 0.052∗∗
(0.014) (0.007) (0.026)
CNAT -0.669 −0.013 − 0.025
(0.789) (0.032) (0.084)
CBUS −0.600∗ −0.019∗ −0.013
(0.029) (0.009) (0.026)
LEV 0.018 −0.001∗∗ −0.006∗
(0.012) (0.004) (0.003)
FS 4.220∗ 0.013∗ 0.082∗
(0.057) (0.006) (0.032)
TAN 3.110∗ −0.122∗ −0.383∗
(0.087) (0.029) (0.046)
PROD 3.211∗ 0.046∗ 0.021
(0.099) (0.012) (0.063)
R2 (within) 0.512 0.111 0.086
R2(between) 0.103 0.241 0.063
R2(overall) 0.106 0.199 0.058
∗ ∗
F-Statistic 86.020 99.890 77.460∗
N 1104 1104 1104
This table presents the fixed-effects regression results on the impact of CEO attributes on corporate reputation, financial
performance, and corporate sustainable growth after controlling the effects of corporate-level specific variables. The
definition and measurement of all the variables are provided in Table 2. * and ** indicate statistical significance at the 1%
and 5% levels, respectively. Standard errors are reported in parentheses

for CEO duality exhibit a significant and negative association with a corporate reputa-
tion (β = −0.506; S.E. = 0.092), suggesting that the companies with CEOs playing a
dual role in conjunction decrease stakeholder perception of firm reputation. This result
is consistent with hypothesis 4(a). The coefficient estimate on CEO remuneration is
0.370 (S.E. = 0.059) and is significant at the 1% level. This indicates that CEOs remuner-
ation increases stakeholder perception of firm reputation. The evidence thus provides
strong support for hypothesis 5(a). Similarly, the coefficient estimate on CEO tenure is
significant and positive (β = 0.037; p < 0.01), suggesting that long-tenured CEOs are
more competent in enhancing the firm’s reputation. The result thus lends strong sup-
port to our hypothesis 6(a). The next manifest variable, CEO nationality appears to have
no significant association with the corporate reputation (β = −0.669; S.E. = 0.789);
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 26 of 50

accordingly, we find no support for hypothesis 7(a). On the contrary, the result for CEO
busyness exhibits a significant and negative association with a corporate reputation
(β = −0.600; S.E. = 0.029). This result is consistent with hypothesis 8(a) and indicates
that CEOs busyness decreases stakeholder perception of firm reputation. In terms of the
control variables, the coefficient estimates on firm size, tangibility, and productivity are
4.220, 3.110, and 3.211, respectively and are statistically significant at the 1% level. This
indicates that the size, tangibility, and productivity of the company do influence stake-
holder perception of firm reputation. On the other hand, leverage does not seem to be
significantly associated with a corporate reputation (β = 0.018; S.E. = 0.012).
The coefficient on CEO gender in model (2) is significant and positive
(β = 0.042; p < 0.05), suggesting that female CEOs do have a favourable influ-
ence over corporate financial performance. This result is consistent with
hypothesis 1(b). On the other hand, the coefficient on CEO age is insignificant
( β = −0.000; S.E. = 0.003), indicating that CEO age has no measurable impact on
corporate financial performance. Thus, hypothesis 2(b) is not supported. The result
for CEO education demonstrates no notable association with corporate financial
performance ( β = 0.033; S.E. = 0.019); accordingly, we find no support for hypoth-
esis 3(b). Likewise, the result for CEO duality shows an insignificant association with
corporate financial performance ( β = 0.006; S.E. = 0.010), suggesting that combining
the leadership does not affect the financial performance of the firm. Thus, hypoth-
esis 4(b) is not supported. The coefficient estimate on CEO remuneration is 0.007
(S.E. = 0.002) and is significant at the 1% level. This indicates corporate performance
gets improved with an increase in CEOs pay. The evidence thus provides strong sup-
port for hypothesis 5(b). The next manifest variable, CEO tenure appears to have no
significant association with corporate financial performance ( β = 0.008; S.E. = 0.007);
accordingly, we find no support for hypothesis 6(b). Likewise, the result for CEO
nationality exhibits an insignificant association with corporate financial performance
( β = −0.013; S.E. = 0.032). Thus, hypothesis 7(b) is not supported. The coefficient
on CEO busyness is significant and negative ( β = −0.019; p < 0.01), indicating that
corporate financial performance deteriorates when the CEO of a firm do hold mul-
tiple directorships concurrently. This result is consistent with hypothesis 8(b). The
estimates for the control variables firm size and productivity exhibit significant posi-
tive associations with corporate financial performance. This suggests larger compa-
nies and companies with higher productivity outperform other companies in terms
of financial performance measured by ROA. In contrast, the results for leverage and
tangibility demonstrate significant and negative relationships with corporate financial
performance.
In model (3), the first manifest variable, CEO gender demonstrates no notable asso-
ciation with corporate sustainable growth (β = −0.054; S.E. = 0.115), indicating that
female CEOs do not influence corporate sustainable growth. Thus, hypothesis 1(c) is not
supported. In contrast, the result for CEO age exhibit a significant and negative associa-
tion with corporate sustainable growth (β = −0.006; S.E. = 0.002), indicating that aged
CEOs are less competent in yielding corporate sustainable growth. This result is in line
with our hypothesis 2(c). The next manifest variable, CEDU appears to have no signifi-
cant effect on corporate sustainable growth (β = 0.028; S.E. = 0.034), contradicting our
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 27 of 50

hypothesis 3(c). This indicates that CEOs advanced education (possessing a Postgradu-
ate degree or Professional degree or PhD or any other equivalent degree) does not affect
corporate sustainable growth. Similarly, CEO duality exhibits an insignificant linkage
with corporate sustainable growth (β = 0.018; S.E. = 0.061), suggesting that dual CEO-
Chair roles do not affect corporate sustainable growth. Thus, we fail to find support for
our hypothesis 4(c). Likewise, CEO remuneration has proven not to be significantly
associated with corporate sustainable growth (β = 0.012; S.E. = 0.003); consequently,
hypothesis 5(c) is not supported. The coefficient estimate on CEO tenure is 0.052
(S.E. = 0.026) and is significant at the 5% level. This indicates that long-tenured CEOs are
more competent in yielding corporate sustainable growth. The evidence thus provides
support for hypothesis 6(c). On the contrary, the result for CEO nationality shows an
insignificant relationship with corporate sustainable growth (β = −0.025; S.E. = 0.084);
consequently, hypothesis 7(c) is not supported. Similarly, the coefficient on CEO busy-
ness is insignificant (β = −0.013; S.E. = 0.026), indicating that CEO busyness does
not affect corporate sustainable growth. Thus, we find no support for hypothesis 8(c).
In terms of the control variables, the result for firm size exhibits a significant positive
association with corporate sustainable growth (β = 0.082; S.E. = 0.032). This suggests
that larger and resourceful firms are more competent in yielding sustainable growth
than smaller and mid-cap firms. In contrast, the results for leverage and tangibility dem-
onstrate significant and negative relationships with corporate sustainable growth. This
indicates highly-levered firms and those firms with relatively high asset tangibility are
less competent than others in yielding sustainable growth. Interestingly, productivity
does not seem to be significantly associated with corporate sustainable growth.

Robustness test
In this section, we perform a three-fold analysis to evaluate the robustness of our results.

Endogeneity: alternative model specifications

The present study applied the static panel data technique to investigate the impact of
CEO attributes on corporate reputation, financial performance, and corporate sustain-
able growth. In particular, the fixed-effects regression (static) has been employed (as
suggested by the Hausman test) as the main estimator. As a robustness check, at the
outset, we re-estimate the baseline models using three alternative model specifications,
namely the 2SLS method (see Zellner and Theil 1992), 3SLS method (see Zellner and
Theil 1992), and two-stage dynamic sys-GMM method (see Blundell and Bond 1998;
Arellano and Bover 1995).
Often, empirical corporate finance research, explaining the causes and effects of finan-
cial decisions, suffers from serious endogeneity issues (Wintoki et al. 2012). Technically
speaking, endogeneity exists when regressors in a regression model are correlated with
the error term in the model (Kong et al. 2020; Arora and Sharma 2016; Lynch and Brown
2011). It is also likely that our baseline model(s) faces the potential problem of endoge-
neity in parameter estimation. Although we utilize the fixed-effects estimator to control
for the issue of omitted variables (see Arora and Sharma 2016), this could still be affected
by other potential factors of endogeneity. For instance, in our empirical estimation, there
might be a reverse causality between corporate reputation and CEO attributes. Also,
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 28 of 50

a reverse causality might endure between corporate financial performance and CEO
attributes. Moreover, there might be a reverse causality between corporate sustainable
growth and CEO attributes. This, as argued by Roberts and Whited (2013) and Wintoki
et al. (2012), leads to biased and inconsistent parameter estimates, making reliable infer-
ence quite impossible. Earlier empirical research (Barros et al. 2020; Arora and Sharma
2016; Roberts and Whited 2013; Wintoki et al. 2012) acknowledge that the endogene-
ity problem arises at least from three potential sources: omitted variable, simultaneity,
and measurement error. Furthermore, endogeneity can occur from the possibility that
current values of the explanatory variables are a function of past values of the depend-
ent variable. ’’Neglecting this source can have serious consequences for inference” (Win-
toki et al. 2012). Therefore, to respond to these endogeneity issues, in line with prior
empirical research, a set of alternative model specifications, viz. 2SLS model (see Ain
et al. 2021; Malik et al. 2021; Andries et al. 2020; Smirnova and Zavertiaeva 2017; Bhatt
and Bhattacharya 2015), 3SLS model (Shi et al. 2021; Ataünal and Aybars 2017; Lee et al.
2016; Bhatt and Bhattacharya 2015; Franken and Cook 2013; Black et al. 2006), and two-
stage dynamic system-GMM model (see Kong et al. 2020; Arora and Sharma 2016; Farag
and Mallin 2016; Wintoki et al. 2012; Schultz et al. 2010) have been adopted. These mod-
els, as argued, allow finer control over the instrumental variables and can yield more
efficient estimators (Lee et al. 2016; Schultz et al. 2010; Roodman 2009).
However, the choice of instruments is extremely critical for model estimation. The
presence of weak instruments in the system will produce bias and inaccurate estimates
(Raithatha and Haldar 2021; Lee et al. 2016; Wintoki et al. 2012). A straightforward
approach to identify the presence of weak instruments in the 2SLS and dynamic sys-
GMM models is to look at the R2 or F-statistic of first-stage regression (see Wintoki et al.
2012). As a rule of thumb, the first-stage F-statistic must be large, generally exceeding
10, for inference of 2SLS and dynamic sys-GMM estimations to be reliable and valid
(Stock et al. 2002; Staiger and Stock 1997, as cited in Lee et al. 2016).
In the present study, six of the selected CEOs attributes, including gender, age, edu-
cation, tenure, nationality, and busyness, are assumed to be exogenous variables (see
Shi et al. 2021; Galiën 2020; Ghardallou et al. 2020; Flabbi et al. 2016; Farag and Mallin
2016). While the target variables (by default), viz. corporate reputation, financial per-
formance, and corporate sustainable growth, the other two CEO attributes, viz. dual-
ity (see Chen et al. 2008) and remuneration (see Shi et al. 2021; Quigley and Hambrick
2015), and all of the control variables, viz. leverage, firm size, tangibility, and produc-
tivity (see Ghardallou et al. 2020) have been assumed to be endogenous variables and
instrumented by lagged variables no more than three periods. Simply speaking, we use
three lags of each exogenous variable as instruments in the equation.
The choice of instruments is motivated by prior empirical research (e.g. Farag and
Mallin 2016; Lee et al. 2016), and verified by the weak instrument test. More distinc-
tively, there are twenty-one equations in the system, including a set of seven equations
for each target variable; each equation contains the remaining six endogenous variables
as explanatory variables along with the aforementioned exogenous and instrumen-
tal variables. For all equations, we control for time-fixed effects and estimate using the
robust standard error option. To assess whether the selected instruments are weak, we
regress each endogenous variable on all exogenous variables in the system (first-stage
Table 7 Estimation results for alternative model specifications. Source: Authors’ own tabulation using STATA software (version 13.1)
Variable Panel A: 2SLS Panel B: 3SLS Panel C: SYS-GMM

Corporate Corporate financial Corporate Corporate Corporate financial Corporate Corporate Corporate Financial Corporate
reputation performance sustainable growth reputation performance sustainable growth reputation Performance Sustainable
Growth
Mukherjee and Sen Financial Innovation

Model (4) Model (5) Model (6) Model (7) Model (8) Model (9) Model (10) Model (11) Model (12)

CGEN -0.246 0.088∗∗ − 0.055 -0.336 0.049∗ − 0.053 -0.310 0.048∗ − 0.057
(0.073) (0.042) (0.057) (0.060) (0.013) (0.023) (0.013) (0.017) (0.046)
CAGE −0.038∗∗ -0.001 −0.007∗ -0.732 -0.001 −0.005∗ -0.001 -0.001 −0.004∗
(3.039) (0.001) (0.001) (0.149) (0.000) (0.001) (0.001) (0.001) (0.001)
(2022) 8:40

CEDU -0.477 0.036 0.029 -0.493 0.038 0.032 -0.376 0.041 0.034
(0.160) (0.009) (0.027) (0.840) (0.006) (0.025) (0.042) (0.010) (0.036)
CDUA −0.514∗ -0.013 -0.034 −0.512∗∗ -0.008 -0.031 −0.581∗ -0.009 -0.035
(0.502) (0.008) (0.022) (0.128) (0.005) (0.020) (0.088) (0.008) (0.020)
CREM 0.379∗ 0.007∗ 0.022 0.383∗ 0.009∗ 0.019 0.380∗ 0.012∗ 0.021
(0.178) (0.002) (0.003) (0.209) (0.000) (0.003) (0.061) (0.005) (0.002)
CTEN 0.047∗ -0.011 0.072∗ 0.038∗ 0.010 0.066∗ 0.044∗ 0.012 0.044∗
(0.125) (0.009) (0.026) (0.083) (0.005) (0.021) (0.013) (0.001) (0.010)
CNAT 0.668 −0.072∗∗ -0.048 0.673 -0.025 -0.038 0.633 -0.018 -0.074
(0.395) (1.025) (0.071) (4.633) (0.016) (0.063) (0.051) (0.023) (0.106)
CBUS −0.657∗ −0.053∗ 0.017 −0.699∗ −0.026∗ 0.015 −0.612∗ −0.038∗ -0.019
(0.029) (0.010) (0.024) (1.471) (0.005) (0.020) (0.008) (0.004) (0.011)
LEV -0.027 −0.002∗ −0.011∗ -0.044 −0.002∗ −0.014∗∗ -0.030 −0.004∗ −0.017∗
(0.085) (0.000) (0.002) (0.135) (0.001) (0.001) (0.003) (0.001) (0.001)
FS 4.631∗ 0.017∗∗ 0.005∗∗ 4.788∗ 0.015∗∗ 0.002∗∗ 4.614∗ 0.017∗∗ 0.129∗
(0.527) (0.004) (0.008) (0.538) (0.001) (0.008) (0.005) (0.002) (0.011)
TAN 3.202∗ −0.140∗∗ −0.387∗∗ 3.191∗ −0.124∗∗ −0.385∗∗ 3.117∗∗ −0.134∗∗ −0.388∗
(0.163) (0.018) (0.047) (0.414) (0.012) (0.057) (0.009) (0.029) (0.042)
PROD 3.718∗ 0.057∗ 0.045 3.690∗ 0.050∗ 0.046 3.639∗ 0.067∗ 0.066
(0.322) (0.007) (0.016) (0.111) (0.004) (0.016) (0.007) (0.019) (0.023)
Year Dummy YES YES YES YES YES YES YES YES YES
Industry Dummy NO NO NO NO NO NO NO NO NO
Page 29 of 50
Table 7 (continued)
Mukherjee and Sen Financial Innovation

Variable Panel A: 2SLS Panel B: 3SLS Panel C: SYS-GMM

Corporate Corporate financial Corporate Corporate Corporate financial Corporate Corporate Corporate Financial Corporate
reputation performance sustainable growth reputation performance sustainable growth reputation Performance Sustainable
Growth

Model (4) Model (5) Model (6) Model (7) Model (8) Model (9) Model (10) Model (11) Model (12)
(2022) 8:40

R2 0.191 0.293 0.059 0.205 0.316 0.062

Chi2(x 2 ) 715.990∗ 1579.880∗ 357.610∗

∗ ∗ ∗
Wald Chi 2 ( x 2 ) 518.230 745.950 55.660 487.707∗ 1940.830∗ 1641.830∗
AR(1) test (0.837) (0.111) (0.238)
(p-value)

AR(2) test (0.482) (0.257) (0.359)

(p-value)
Hansen test (0.399) (0.314) (0.347)
(p-value)
N 690 690 690 690 690 690 690 690 690

This table presents the estimates of the robustness test with alternative model specifications. The endogenous variables in the corporate reputation regressions are REP (by default), CDUA, CREM, LEV, FS, TAN, and PROD
and instrumented by lagged variables no more than three periods. The exogenous variables in the corporate reputation regressions are CGEN, CAGE, CEDU, CTEN, CNAT, and CBUS. Three lags of each exogenous variable
have been used as instruments in the equation. The endogenous variables in the corporate financial performance regressions are CFP (by default), CDUA, CREM, LEV, FS, TAN, and PROD and instrumented by lagged
variables no more than three periods. The exogenous variables in the corporate financial performance regressions are CGEN, CAGE, CEDU, CTEN, CNAT, and CBUS. Three lags of each exogenous variable have been used as
instruments in the equation. The endogenous variables in the corporate sustainable growth regressions are CSG (by default), CDUA, CREM, LEV, FS, TAN, and PROD and instrumented by lagged variables no more than three
periods. The exogenous variables in the corporate sustainable growth regressions are CGEN, CAGE, CEDU, CTEN, CNAT, and CBUS. Three lags of each exogenous variable have been used as instruments in the equation.
The regressions are estimated after controlling for time-fixed effects and using the robust standard error option. The definition and measurement of all the variables are provided in Table 2. * and ** indicate statistical
significance at the 1% and 5% levels, respectively. Robust standard errors are reported in parentheses
Page 30 of 50
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 31 of 50

regression). The values of R2 (unreported) and F-statistics (unreported) for the regres-
sions under each set are largely in conformity to the rules of thumb, suggesting that the
chosen instruments are sufficiently strong.
Table 7 presents the results of the robustness test with alternative model specifica-
tions, namely 2SLS, 3SLS, and two-stage dynamic sys-GMM as in Panel A, Panel B,
and Panel C, respectively. Largely, the results presented in Panel A are similar to those
obtained from fixed-effects estimates of a static model reported in Table 6. However,
the coefficient on CEO age, in the model (4), is statistically significant for the corporate
reputation measure (β = −6.018; p < 0.05) using a 2LS estimator. This is in sharp con-
trast to the estimate from the static fixed-effects model in which the coefficient on CEO
age is insignificant (β = −0.311; S.E. = 0.191). Interestingly, when we move to 3SLS
and the dynamic sys-GMM model, this result disappeared. We witness a similar sce-
nario in model (5) about the CEO nationality. The static fixed-effects estimate suggests
an insignificant linkage between CEO nationality and corporate financial performance
(β = −0.013; S.E. = 0.032). Interestingly, when we estimate this in a 2SLS model, the
coefficient on CEO nationality is found to be statistically significant for corporate finan-
cial performance measure (β = −3.072; p < 0.05). However, in the other two models,
viz. 3SLS and dynamic sys-GMM model, the relation between the above two constructs
is insignificant (β = −0.025; S.E. = 0.016 and β = −0.008; S.E. = 0.023, respectively).
The intuition behind these dramatic significance flips is an interesting one and demon-
strates there is some unobservable heterogeneity that is not captured by past corporate
reputation and corporate financial performance in model (4) and model (5), respectively
under Panel A.
The results presented in Panel B and Panel C echo those obtained from fixed-effect
estimates of a static model reported in Table 6. Except for a minor change in the magni-
tude of the estimated coefficients on the variables of interest, viz. CEO traits and control
variables, the results presented in the aforementioned panels corroborate our main find-
ings (both in sign and significance) and remain robust.
Table 7 also report the results of post-estimation tests − the AR(2) second-order
serial correlation test and the Hansen test of over-identifying restrictions for the sys-
GMM model (outlined in Panel C). The AR(2) test yields p-values − 0.482, 0.257, and
0.358 for models 10, 11, and 12, respectively, indicating that the null hypothesis of no
second-order serial correlation cannot be rejected. The results in Table 7 also show the
Hansen test-statistic with the p-values of 0.399, 0.314, and 0.347 for models 10, 11, and
12, respectively. This suggests the null hypothesis that the instruments are valid, cannot
be rejected.
In summary, the results of alternative model specifications show that even after con-
trolling for endogeneity issues such as omitted variable bias, simultaneity bias, measure-
ment error bias, and the potential effect of past values of the dependent variable(s) on
current values of the explanatory variables − results are similar to those obtained from
fixed-effects estimates of a static model (baseline model) and remain robust.
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 32 of 50

Table 8 Estimation results for other robustness tests. Source: Authors’ own tabulation using STATA
software (version 13.1)
Variable Corporate reputation Corporate financial Corporate sustainable
performance growth
Model (13) Model (14) Model (15) Model (16) Model (17) Model (18)

Constant −1.781∗ −1.775 1.141 0.179∗∗ −1.338 0.661

(0.114) (1.709) (0.778) (0.085) (0.341) (0.435)
CGEN -0.138 -1.078 0.209∗ 0.040∗∗ 0.060 -0.058
(0.453) (0.456) (0.015) (0.023) (0.113) (0.003)
CAGE -0.002 -0.022 -0.022 -0.000 0.293∗ −0.006∗
(0.009) (0.012) (0.019) (0.001) (0.005) (0.025)
CEDU 0.395 0.484 0.726 0.033 −0.032 0.037
(0.299) (0.388) (0.624) (0.019) (0.034) (0.034)
CDUA −0.180∗∗ −0.496∗∗ 0.711 0.008 -0.007 0.013
(0.002) (0.043) (0.388) (0.012) (0.027) (0.062)
CREM 0.045∗∗ 0.282∗ 0.069∗∗ 0.007∗ -0.009 0.014
(0.059) (0.049) (0.078) (0.002) (0.004) (0.012)
CTEN 0.209∗∗ 0.194∗∗ 0.172 0.008 −0.060∗∗ 0.032∗∗
(0.014) (0.058) (0.237) (0.007) (0.025) (0.040)
CNAT -0.193 0.074 -0.046 -0.004 0.025 -0.021
(0.438) (0.663) (0.311) (0.033) (0.084) (0.083)
CBUS −0.221∗ −0.201∗ −0.936∗ −0.013∗∗ 0.012 -0.003
(0.031) (0.092) (0.006) (0.010) (0.017) (0.048)
LEV 0.012 0.005 -0.006 −0.001∗ 0.005∗∗ −0.006∗
(0.008) (0.010) (0.005) (0.001) (0.003) (0.003)
FS 1.788∗ 3.120∗ 0.151∗ 0.013∗∗ −0.008∗ 0.004∗∗
(0.100) (0.041) (0.062) (0.007) (0.010) (0.036)
TAN 1.477∗ 1.918∗ −0.611∗ −0.124∗ 0.122∗ −0.385∗
(0.145) (0.080) (0.075) (0.029) (0.062) (0.148)
PROD 0.644∗ 2.179∗ 0.329∗ 0.046∗ -0.205 0.021
(0.191) (0.053) (0.118) (0.013) (0.026) (0.020)
BS -0.026 -0.000 -0.004
(0.030) (0.001) (0.004)
BD 3.582∗ -0.007 -0.143
(0.078) (0.039) (0.150)
BIND 2.966∗ -0.015 -0.011
(0.090) (0.019) (0.099)
FBM 0.173∗ 0.004∗∗ 0.005
(0.045) (0.002) (0.011)
PFAMA 0.053 -0.030 0.076∗
(0.341) (0.017) (0.027)
R2 (within) 0.456 0.674 0.127 0.118 0.081 0.051
R2(between) 0.085 0.091 0.205 0.224 0.079 0.206
R2(overall) 0.089 0.094 0.176 0.189 0.068 0.043
∗ ∗ ∗ ∗ ∗
F-Statistic 68.130 115.47 77.510 77.480 72.820 71.220∗∗
N 1104 1104 1104 1104 1104 1104
This table presents the estimates of robustness tests with alternative measures and controlling for corporate governance
variables. The definition and measurement of all the variables are provided in Table 2. * and ** indicate statistical
significance at the 1% and 5% levels, respectively. Standard errors are reported in parentheses

Other robustness tests

Alternative measures In this section, we replicate our main analysis by considering alter-
native measures to our predicted variables, viz. corporate reputation, corporate financial
performance, and corporate sustainable growth. The natural logarithm of market capital-
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 33 of 50

ization is used as an alternative measure for corporate reputation (see Nanda et al. 1996;
Shefrin and Statman 1995, as cited in Kaur and Singh 2018b), and the net profit margin
(see Mulyadi and Sihabudin 2020; Cengiz 2016) and deviation (see Mukherjee and Sen
2019b; Li et al. 2015; Amouzesh et al. 2011) have been employed to measure corporate
financial performance and corporate sustainable growth, respectively. It’s worth noting,
however, the deviation indicates “how close or far the firm is to attain sustainable growth;
the lesser the deviation, the closer the firm is to attain sustainable growth and vice-versa”
(Mukherjee and Sen 2019b, p. 175). As such, the coefficient signs of predictor variables
using this alternative are expected to be in the reverse direction to those obtained with
the SGR measure in model (3) of Table 6. Using the fixed-effect regression model (as
suggested by the Hausman test), we re-run the models (1), (2) and (3) of Table 6 by con-
sidering the aforementioned alternative measures. Models (13), (15) and (17) in Table 8
report the results of this analysis. The results for model (13) show that CEO remuneration
and CEO tenure positively affects the firm’s reputation, while the effects of CEO duality
and CEO busyness on corporate reputation are significant and negative at conventional
levels. This affirms the results obtained in model (1) of Table 6 remain robust at levels.
Model (15) in Table 8 exhibits CEO gender and CEO remuneration positively affects the
firm’s financial performance, while the effect of CEO busyness on corporate reputation is
significant and negative. This confirms the results obtained in model (2) of Table 6 remain
robust at levels. Similarly, the estimates for model (17) show that the results obtained in
model (3) of Table 6 remain robust at levels, affirming that the CEO age and CEO tenure
affects corporate sustainable growth significantly.

Controlling for corporate governance Here, we replicate our main analysis after con-
trolling for corporate governance. Prior researches provide evidence that the quality
of a firm’s governance relates to its reputation (e.g. Bravo et al. 2015; Gündoğdu 2015),
financial performance (e.g. Almoneef and Samontaray 2019; Kuntluru 2019; Dash and
Raithatha 2019; Arora and Bodhanwala 2018) and sustainable growth (e.g. Mukherjee
and Sen 2019b). Thus, to attenuate potential omitted variable bias, we re-estimate the
baseline models after controlling for the firm’s governance structure. More distinctively,
in addition to the set of control variables employed in the analysis, we control for five
more variables, representing corporate governance structure, namely board size (BS), as
measured by total number of directors on the board at period t (see Che and Langli 2015),
board diversity (BD), as measured by number of women directors on the board at period
t scaled by the total number of directors on the board at period t (see Akpan and Amran
2014), board independence (BIND), as measured by number of independent directors on
the board at period t scaled by the total number of directors on the board at period t (see
Liu et al. 2015), frequency of board meetings (FBM), as measured by number of board
meetings held during period t (see Vo and Phan 2013) and family affiliation on board, as
measured by dummy variable ‘0’ and ‘1’, i.e., Coded ‘1’, if more than one family member on
the board during period t and Coded ‘0’, otherwise (see Rutherford et al. 2006) in all the
baseline models (1), (2) and (3) of Table 6 and re-run the regression. The estimates of the
Hausman test (unreported) confirmed that the application of a fixed-effect model is pref-
erable to the random-effect model. Models (14), (16) and (18) in Table 8 report the results
of this analysis. The results for model (14) demonstrate that CEO remuneration and CEO
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 34 of 50

Table 9 Hypotheses remarks. Source: Authors’ own tabulation

Hypotheses Remarks

H1a : CEO Gender has a positive impact on corporate reputation Rejected

H1b : CEO Gender has a positive impact on corporate financial performance Accepted
H1c : CEO Gender has a positive impact on attaining corporate sustainable growth Rejected
H2a : CEO Age has a negative impact on corporate reputation Rejected
H2b : CEO Age has a negative impact on corporate financial performance Rejected
H2c : CEO Age has a negative impact on attaining corporate sustainable growth Accepted
H3a : CEO Education has a positive impact on corporate reputation Rejected
H3b : CEO Education has a positive impact on corporate financial performance Rejected
H3c : CEO Education has a positive impact on attaining corporate sustainable growth Rejected
H4a : CEO Duality has a negative impact on corporate reputation Accepted
H4b : CEO Duality has a negative impact on corporate financial performance Rejected
H4c : CEO Duality has a negative impact on attaining corporate sustainable growth Rejected
H5a : CEO Remuneration has a positive impact on corporate reputation Accepted
H5b : CEO Remuneration has a positive impact on corporate financial performance Accepted
H5c : CEO Remuneration has a positive impact on attaining corporate sustainable growth Rejected
H6a : CEO Tenure has a positive impact on corporate reputation Accepted
H6b : CEO Tenure has a positive impact on corporate financial performance Rejected
H6c : CEO Tenure has a positive impact on attaining corporate sustainable growth Accepted
H7a : CEO Nationality has a positive impact on corporate reputation Rejected
H7b : CEO Nationality has a positive impact on corporate financial performance Rejected
H7c : CEO Nationality has a positive impact on attaining corporate sustainable growth Rejected
H8a : CEO Busyness has a negative impact on corporate reputation Accepted
H8b : CEO Busyness has a negative impact on corporate financial performance Accepted
H8c : CEO Busyness has a negative impact on attaining corporate sustainable growth Rejected

tenure positively affects the firm’s reputation, while the effects of CEO duality and CEO
busyness on corporate reputation are significant and negative. This reaffirms the results
obtained in model (1) of Table 6 remain robust at levels. Model (16) in Table 8 exhibits
CEO gender and CEO remuneration positively affects the firm’s financial performance,
while the effect of CEO busyness on corporate reputation is significant and negative. This
re-confirms the results obtained in model (2) of Table 6 remain robust at levels. Likewise,
the estimates for model (18) show that the results obtained in model (3) of Table 6 remain
robust at levels, reaffirming that the CEO age and CEO tenure affects corporate sustain-
able growth significantly.
Overall, the results of other robustness tests show that apart from a slight variation in
the magnitude of the estimated coefficients, results corroborate our main findings and
remain robust at levels. Hypotheses remarks have been reported in Table 9.

Discussion

Key findings
This study investigates the impact of CEO attributes (demographic and job-specific
both) on corporate reputation, financial performance, and corporate sustainable growth
in India. Our analysis is based on the sample of 138 NSE listed top non-financial Indian
companies for the period from 2010 to 2017. We find that the companies with CEOs
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 35 of 50

playing a dual role in conjunction decrease stakeholder perception of firm reputation.

This result supports the perspective of agency theory and research by Caiffa et al. (2021),
who noted stakeholders’ do not appreciate the concentration of power in a single indi-
vidual who serves the same company with more than one role. Conceivably, stakehold-
ers’ or investors do hold the notion that CEO duality can weaken the protection sought
by shareholders and may incentivize CEO entrenchment by diminishing board monitor-
ing effectiveness. For this reason, CEOs dual role in conjunction, not generally favour-
ably perceived by the market. Similar to Schulz and Flickinger (2018), we find that CEOs
remuneration increases stakeholder perception of firm reputation. The likely explana-
tion for this phenomenon is that premium remuneration is interpreted by stakehold-
ers’ as a signal for managerial skills. More distinctively, stakeholders’ perhaps do hold
the notion that higher-paid CEOs are better, smarter and quite efficient than the ones
who were paid reasonable remuneration. For this reason, CEOs remuneration, gener-
ally favourably perceived by the market. As expected, we find that long-tenured CEOs
are more competent in enhancing the firm’s reputation. This evidence is consistent with
the findings of Conte (2018) and Schulz and Flickinger (2018) that noted stakeholders’
do appreciate it when a company is controlled and managed by long-tenured CEOs. The
logical explanation for this phenomenon is that stakeholders’ perhaps do hold the notion
that long-tenured CEOs are more pro-active and efficient than the short-tenured CEOs.
More specifically, stakeholders’ perhaps do believe long-tenured CEOs gain familiarity
with the organizational culture and resources, over the tenure, and thereby they develop
a major commitment to the organization. For this reason, long-tenured CEOs are gen-
erally favourably perceived by the market. Further, we find evidence that CEOs busy-
ness decreases stakeholder perception of firm reputation. This result is in line with the
findings of Ratri et al. (2021), who observed CEO’s busyness provide a negative signal
for investors or stakeholders’. Conceivably, stakeholders’ or investors do hold the notion
that if the CEO remains too busy, the CEO will not have enough energy and time to stay
focused on their principal task, and thereby CEOs efficacy in managing the company
and devising strategy might get impaired. For this reason, CEOs busyness, not generally
favourably perceived by the market. On contrary to our expectations, we find insignifi-
cant associations between CEO gender, CEO age, CEO education, CEO nationality and
corporate reputation. The moderating roles of third variables may have explained the
results of such insignificant relationships.
Our empirical results also confirm those female CEOs do have a favourable influ-
ence over corporate financial performance. This result accords with the findings of
Faccio et al. (2016) and Francoeur et al. (2008) yet contradicts the research by Kaur
and Singh (2018a) that noted an insignificant relationship between CEO gender and
corporate financial performance. The likely explanation for this phenomenon is that
female CEO is more effective in coordinating, controlling, and supervising the man-
agement, as they are more risk-averse (Croson and Gneezy 2009; Weber et al. 2002),
and are accustomed to multitasking (Ruderman et al. 2002) compared to male CEOs,
which in turn lead to improved firm performance. On contrary to our expectations,
we find that CEO age has no measurable impact on corporate financial performance.
This result is in line with the findings of Lindeman (2019) and Educardo and Poole
(2016) that noted no linkage between the CEO’s age and corporate performance.
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 36 of 50

Consistent with the findings of Kaur and Singh (2018a) and Morresi (2017), we find
that CEOs advanced education (possessing a Postgraduate degree or Professional
degree or PhD or any other equivalent degree) does not affect corporate financial per-
formance. Likewise, we find no significant association between CEO duality and cor-
porate financial performance. This result supports the research by Kaur and Singh
(2018a) and Vintilă et al. (2015) yet contradicts the research by Lindeman (2019)
and Azeez (2015) that noted a significant association between CEO duality and cor-
porate financial performance. As expected, we find clear evidence that corporate
performance gets improved with an increase in CEOs pay. This result supports the
perspective of agency theory and findings of Kaur and Singh (2018a) and Matousek
and Tzeremes (2016) that observed CEO remuneration is associated with positive
corporate performance. As stated earlier, both the shareholder and the manager,
according to agency theory, are utility maximizers with different interests (Capital-
ism 2009). A conflict of interest arises between the owners and the managers once
the control and ownership get separated (Fama and Jensen 1983; Holmstrom 1979);
aligning their interests comes at a cost (Berk and Demarzo 2016). Many academics
have argued attractive remuneration to CEO is an effective governance mechanism
that mitigates this conflict of interest, improves CEOs involvement in achieving the
shareholders objective, and consequently improves the financial performance of com-
panies (Raithatha and Haldar 2021; Al-Shammari 2021; Zoghlami 2021; Smirnova and
Zavertiaeva 2017; Kazan 2016). Drawing on the expectancy theory of motivation, we
further argue that remuneration act as a good stimulus, and as a result, motivates
the CEO to work in the favour of shareholders and capitulate superior corporate
performance (Jekins et al. 1998; Vroom 1964). Another reason for this phenomenon
might be cognitive. More specifically, well-paid CEOs feel being paid more attention
by their top-level management, work more sincerely and harder, and consequently
improve corporate financial performance (Shi et al. 2021). Similar to Tien et al.
(2013), we find that CEO tenure does not affect corporate financial performance.
Likewise, our results suggest that CEO nationality does not affect corporate finan-
cial performance. This result contradicts the research by Kaur and Singh (2018a) and
Badru and Raji (2016) that observed a significant association between CEO nation-
ality and corporate financial performance. Further, our results reveal that corporate
financial performance deteriorates when the CEO of a firm do hold multiple director-
ships concurrently. This result is in line with the findings of Harymawan et al. (2019)
and Falato et al. (2014) yet contradicts the research by Mendez et al. (2017) and Tien
et al. (2013), who argued CEOs with multiple directorships expedite companies to
attain better performance. The logical explanation behind this phenomenon is that
if the CEO remains too busy, the CEO will not have enough energy and time to stay
focused on their principal task of managing and formulating company strategies, and
thereby the firm activity gets disrupted and firm performance tends to deteriorate
(Harymawan et al. 2019; Falato et al. 2014; Cashman et al. 2012).
Further, our results reveal those female CEOs do not influence corporate sustainable
growth. A possible explanation is that very few Indian firms have had female CEOs, and
hence panel evaluations of this relationship are determined with a vast statistical uncer-
tainty (Kaur and Singh 2018a). Our results also show that aged CEOs are less competent
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 37 of 50

in yielding corporate sustainable growth. We argue that as CEOs get older they are less
likely to bring up new ideas because they are more conservative; this, in turn, deteri-
orates the corporate performance and affects the ability to attain sustainable growth
adversely. On contrary to our expectations, we find that CEOs advanced education (pos-
sessing a Postgraduate degree or Professional degree or PhD or any other equivalent
degree) does not affect corporate sustainable growth. The logical reasoning behind this
phenomenon is that the time gap between the point the CEO completes the studies and
the point he/she attains the position of CEO is quite lengthy, in general; in consequence,
the benefits which may accrue to a firm or CEO from gaining from the quality or area
of his/her educational background severely gets eroded (Gottesman and Morey 2010).
Our empirical results also suggest that CEO-Chair roles do not affect corporate sustain-
able growth. The likely explanation behind this phenomenon is that there may be the
presence of other variables that mediate the effect of dual CEO-Chair roles on corporate
sustainable growth, in the Indian context. Similarly, the results indicate that CEO remu-
neration does not affect corporate sustainable growth. On the other hand, as expected,
we find that long-tenured CEOs are more competent in yielding corporate sustainable
growth. The logical explanation behind this phenomenon is that long-tenured CEOs are
very familiar with the firm’s resources and methods of operation, thereby provide more
informed direction and guidance which helps the firms to perform better and attain sus-
tainable growth. Interestingly, the empirical results reveal that neither CEO nationality
nor CEO busyness has a significant impact on corporate sustainable growth. As men-
tioned, the moderating roles of third variables may have explained the results of such
insignificant relationships.

Theoretical implications
The present study has some important theoretical contributions. In contrast to the
conventional wisdom that organizational outcomes are heavily constrained and driven
by organizational structure and institutional forces, the present study supports the
view that organizational outcomes are reflections of the values and cognitive bases of
top executives. In particular, this study is in line with the upper echelons theory that
offers clear evidence that experiences, values, and personalities of CEOs proxied by their
demographic and job-specific attributes exercise noticeable influence in explaining cor-
porate outcomes. Prior research has demonstrated very similar results to this that the
traits of upper echelons do influence corporate outcomes. However, those studies have
mainly focused on the company’s short-term orientation, in particular the financial per-
formance. Unfortunately, very little or no emphasis has been placed on the company’s
long-term perspective. This study extends the upper echelons theory demonstrating
how top executives’ values or preferences affect both short-term and long-term orien-
tations of the firms by evidencing the impact of CEO attributes on corporate reputa-
tion, financial performance, and corporate sustainable growth. Further, to the best of our
knowledge, this study is the first to examine the effects of CEO traits on three diverse
corporate dimensions under one roof in the context of the Indian market. Notably, the
job-specific attributes of CEO, viz. CEO remuneration, CEO duality, and CEO busyness,
among others, are considered critical components of the corporate governance sys-
tem. The majority of the earlier studies have either focused on the CEO’s demographic
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 38 of 50

characteristics or job-specific traits. Unlike prior studies, this study by exploring the
influences of both the demographic and job-specific attributes of the CEO jointly on
corporate reputation, financial performance, and corporate sustainable growth contrib-
utes significantly to the corporate governance literature. Finally, the results support the
contention that diversity in top management brings to the organization unique human
capital, which is important for gaining a competitive advantage. More specifically, this
study is in line with the human capital theory and resource dependence theory that pro-
vides strong evidence that female participation in top management improves corporate
performance. As such, the findings of the study also contributes to the gender diversity
literature and is relevant to redefining women’s roles in society, especially in India, soci-
ety is dominated by male power till-date.

Managerial implications
Besides the aforementioned theoretical implications, the findings of this study propose
several managerial implications for scholars, non-financial companies, governments, and
policymakers, among others who are interested in firms’ short-run and long-run perfor-
mances through a proper alignment amongst CEO experience, values, and personalities
and governance structures. First, this research provides a basis for the shareholders and
policymakers to identify areas of consideration when appointing CEOs and determining
their roles and responsibilities in India. Generally, the shareholders and policymakers
seek to recruit the most competent CEOs with the necessary set of skills and educational
qualifications to meet shareholders’ goals and achieve long-term success. We argue
that given an equivalent set of skills and qualifications, policymakers and sharehold-
ers should consider other observable attributes, namely age, gender, and tenure while
recruiting CEOs. More distinctively, if the goal of the firm is to achieve superior long-
run performance, the search committee should consider younger and longer-tenured
CEO candidates, since they are more likely to assist a firm to attain sustainable growth.
On the other hand, if the goal of the firm is to achieve a better short-run performance,
the search committee should consider female CEO candidates, as they seem to function
well in this capacity. Diversity in top management, especially in terms of gender is highly
recommended to improve corporate financial performance in India. Interestingly, our
sample indicates that the proportion of female executives is severely lagging. Hence, we
recommend policymakers and boards take more and more initiatives and set policies to
support for greater participation of female CEOs. Second, our empirical results provide
suggestive evidence for the board of directors to fix CEO remuneration levels efficiently
and to justify relatively high-level CEO pay. Corporate reputation is an important stra-
tegic asset and vital for firm long-run sustainability (Schulz and Flickinger 2018). At the
same time, corporate financial performance is equally vital for firms to create value and
achieve short-run growth plans. Through inducing a proper remuneration structure in
favour of executives (i.e., a high-level CEO pay package) a perfect balance can be main-
tained between executives’ goals and short-run and long-run organizational goals. Third,
it should be noted that the separation of management and ownership (non-duality) is
crucially important in current business (Wijethilake and Ekanayake 2019). Further, hold-
ing limited directorships at a time by CEOs is equally crucial for organizations to per-
form better and establish a good reputation in today’s competitive business world. In
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 39 of 50

this context, we strongly recommend that policymakers adopt appropriate policies on

corporate governance and other codes of best practice. Finally, this research can be an
essential source of information for investors and corporate managers when it comes to
formulating and implementing investment policy.

Limitations and scope for further research

Despite this study providing several theoretical and managerial implications, some cave-
ats could pave the way for further research and expand this domain. First, the present
study is conducted in the context of the Indian market. The academicians, research
scholars, and corporate managers, among others, could extend this study to other
countries for comparison. Second, the research sample consists of NSE listed top non-
financial Indian companies. Further research in this domain could be conducted by
employing an increased number of observations including both the financial and non-
financial Indian companies, or researchers could even explore the same relationships
in the context of small-scale enterprises in India. Third, research scholars could extend
the present study by integrating the alternative corporate sustainable growth models,
viz. simple growth model (see Alayemi and Akintoye 2015), Van Horne’s model (see
Van Horne and Wachowicz 2015, p. 190–192), and Zakon’s model (see Amouzesh et al.
2011), among others or by using the other measures for quantifying corporate reputa-
tion and financial performance or by taking into consideration the other CEO attrib-
utes, such as facial traits and psychological traits, among others. Fourth, this study did
not address the moderating role of a few potential components in explaining the nexus
between the studied variables of interest. Thus, we call on future studies to assess the
moderating role of corporate governance, organizational culture, political environment,
psychological environment, and socio-cultural environment, among others in explaining
the relationship between CEO traits and corporate reputation, financial performance,
and corporate sustainable growth. Furthermore, it’s likely that our three response varia-
bles, viz. corporate reputation, financial performance, and corporate sustainable growth,
could be related to each other. As such, it would be interesting to see the simultaneous
influence among corporate reputation, financial performance, and corporate sustain-
able growth in explaining the impact of CEO traits on each corporate aspect. Finally,
we encourage further CEO attributes studies to evaluate its effects on the quality of CSR
disclosure and earnings management.

Conclusion
This study investigates the impact of CEO attributes (demographic and job-specific
both) on corporate reputation, financial performance, and corporate sustainable growth
in India. Using a sample of 138 NSE listed top non-financial Indian companies for the
period from 2010 to 2017, the static panel data analysis shows that CEO remuneration
and tenure maintains significant positive associations with corporate reputation, while
duality and CEO busyness are found to be associated with corporate reputation nega-
tively. However, we find no significant associations between CEO gender, age, education,
nationality and corporate reputation. The results also show that female CEOs and CEO
remuneration are associated with corporate financial performance positively, whereas
CEO busyness, as expected, maintains a significant negative association with corporate
Mukherjee and Sen Financial Innovation (2022) 8:40 Page 40 of 50

financial performance. Interestingly, no significant relationships could be found between

CEO age, education, duality, tenure, nationality and corporate financial performance.
Moreover, the results demonstrate that CEO age is associated with corporate sustainable
growth negatively, while tenure appears to have a significant and positive association
with corporate sustainable growth. However, we fail to find any significant associations
between CEO gender, education, duality, remuneration, nationality, busyness and cor-
porate sustainable growth. The results hold to a battery of robustness tests, including
controlling for endogeneity issues.
Overall, the empirical results confirm our theoretical contentions, partially. The results
provide clear evidence that in the Indian context, CEO attributes (demographic and job-
specific both) exercise noticeable influence in explaining corporate reputation, financial
performance, and corporate sustainable growth. These findings are in line with previous
studies that noted the attributes of CEO do matter for corporate outcomes and its sus-
tainability, supporting the upper echelons theory and resource dependence theory.

Acknowledgements
We are highly indebted to all four anonymous reviewers for providing their precious time and tremendous effort in
going through our entire research work minutely. Their insightful remarks, recommendations and guidance in framing
this manuscript are greatly appreciated. We would also like to express our sincere gratitude to the editor(s) and editorial
team of Financial Innovation for extending their co-operation, guidance and regular encouragement in completing this
research on time.

Authors’ contributions
TM conceived of the study, and performed the statistical analysis and helped to draft the manuscript. SSS participated in
the sequence alignment and assisted in its design. All authors read and approved the final manuscript.

Funding
Not applicable.

Availability of data and materials

The datasets generated during and/or analyzed during the current study are available from the corresponding author on
reasonable request.

Declarations
Competing interests
The authors declare that they have no competing interests.

Author details
1
Xavier Law School, St. Xavier’s University Action Area III, B, Newtown, Kolkata, West Bengal 700160, India. 2 Department
of Commerce, Burdwan University Golapbag, Bardhaman, West Bengal 713104, India.

Received: 14 June 2021 Accepted: 3 March 2022

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