Three-way interaction effect of specialist CEOs, structural inertia, and environmental uncertainty on firm performance: evidence from Chinese manufacturing industry

This research aims to further demystify the impact of specialist CEOs on firm performance. Drawing on the perspective of substitutes for leadership and organizational inertia theory, this research examines the three-way interaction effect of specialist CEOs, structural inertia and environmental uncertainty on firm performance. In study 1, panel data of Chinese A-share listed manufacturing firms from 2011 to 2022 are used to examine our hypotheses. In study 2, a conducted survey from 196 manufacturing firms further corroborates the obtained results. Our findings show that specialist CEOs are positively related to firm performance, but structural inertia plays a substitute role in negatively moderating such relationships. Furthermore, environmental uncertainty is verified as a critical boundary condition to weaken the moderation effect. The implications of our findings for theory and practice are discussed.