Page 242 - AJWEP-22-4

Lv, et al.

and R&D, and promoting policy implementation. Table 11. Indicators for Chief Executive Officer
52
The CEO’s level of power significantly influences the power measurement
allocation of corporate resources and the firm’s strategic Power Symbols Interpretation of indicators
direction. A highly empowered CEO can directly use dimension
Fs to support initiatives aligned with long-term goals. Organizational Dual Whether to be the chairman
Greater access to diverse resources also enhances power of the board of directors at
the CEO’s ability to integrate information and make the same time; yes=1, no=0
rational decisions that improve corporate performance Insider Whether it is an internal
and reduce misconduct. Moreover, powerful CEOs are director of the company;
more capable of translating personal vision and intent yes=1, no=0
into executable corporate strategies, which influences Expert power Rank Whether or not you have a
the level of green production and the credibility of high title, yes=1, no=0
corporate ESG disclosures. Meanwhile, CEOs with Tenure Whether the tenure exceeds
higher power often factor in reputational considerations, the industry median; yes=1,
leading to a reduced emphasis on short-term gains and no=0
greater caution in ensuring alignment between corporate Ownership CEO Whether to hold the
words and actions. This suppresses short-termism and power share Company’s equity; yes=1,
promotes consistency in ESG commitments. From a no=0
psychological perspective, the pursuit of power is deeply Institute Whether institutional
rooted in human nature. Once attained, individuals share investor ownership is below
53
tend to preserve or expand their power. Accordingly, the industry median; yes=1,
high-power CEOs are particularly attentive to no=0
maintaining their authority, which is closely tied to the Reputational Education Whether you have a high
firm’s compliance record, reputation, and aligning with power degree or not, master’s
the board’s expectations. In the context of stringent degree or above=1, others=0
environmental protection policies, such CEOs are more Part-time Whether to work part-time
inclined to steer their firms away from pollution and job outside the enterprise, yes=1,
Gws practices. This paper argues that high-power CEOs no=0
use Fs to align with policy requirements to mitigate
risks. Table 12. CEO power grouping
In this study, CEO power (Power) was further Variables Gws
measured through a principal component analysis (1) (2)
incorporating four dimensions: organizational power,
expert power, ownership power, and reputational power Level of CEO authority High power Low power
(Table 11). The first principal component was adopted L. Cepi −0.058 −0.088
as a composite indicator of CEO power. In addition, (−0.96) (−1.29)
54
a tertile grouping of CEO power was employed. Firms Fs −0.003 0.181**
in the top one-third were classified as the high-power (−0.04) (2.57)
group, while those in the bottom two-thirds constitute Cepi × Fs 0.061** 0.014
the low-power group. The corresponding regression (2.01) (0.39)
results are presented in Table 12. In the high-power Control variables Controlled Controlled
CEO group, the interaction term between CEPI and Year effect Controlled Controlled
Fs yielded a significant coefficient of 0.061, whereas
it was insignificant with a coefficient of 0.014 in the Industry effects Controlled Controlled
low-power CEO group. In addition, the interaction Observations 2,081 1,896
term between CEPI and Fs in the full sample exhibited R-squared 0.137 0.124
a significant coefficient of 0.042. These results suggest Note: Firm-level clustering robust standard errors are presented
that in the high-power CEO group, Fs plays a stronger in parentheses and correspond to the t-values of the two-sided
positive moderating role in the inhibitory effect of CEPI t-test. *p<0.1, **p<0.05, ***p<0.01.
Abbreviations: CEO: Chief Executive Officer; Fs: Financial
on corporate ESG Gws. A plausible explanation is that slack; cepi: Central environmental protection inspection;
greater CEO power enables more direct utilization of Gws: Greenwashing.

Volume 22 Issue 4 (2025) 234 doi: 10.36922/AJWEP025280219