The effect of CEO succession on green technology innovation: the mediating effect of earnings management

Because chief executive officer (CEO) behavior is an important factor in enterprise strategic decision-making, the effect of CEO behavior on green technology innovation has become a vital research concern related to the sustainability of China's economic development. Using a sample of Chinese A-share listed companies from 2008 to 2019, and employing the Logit regression method and the causal mediating instrumental variable model, this paper examines the effect of CEO succession on green technology innovation and analyzes the mediating role of earnings management. The results show that CEO succession significantly negatively affects the performance of green technology innovation. This is mainly attributable to increase in enterprise earnings management motivation both before and after the CEO succession, thus affecting the CEO to implement green technology innovation motivation. Earnings management is thus identified as a factor in inhibiting green technology innovation during succession periods. Further subdividing the sample, the impact of CEO succession on green technology innovation shows strong heterogeneity; where state-owned enterprises and analysts pay more attention, the successor CEO's motivation for earnings manipulation is weak, which weakens the negative effect of CEO succession on green technology innovation. The above conclusions are still robust after using the instrumental variable method, propensity score matching method, and the control of new environmental protection laws to alleviate endogeneity. The findings of this study contribute to the expansion of research on internal factors influencing green technology innovation, providing new empirical evidence for promoting the practice of green technology innovation within enterprises.