Management short-sighted behavior and enterprise ESG performance - Evidence from listed companies in China

High-order theory indicates that management characteristics determine strategic decision-making and enterprise performance. As developers of strategic directions of enterprises, managers are essential senior human capital. They are vital in strategic planning and adjustment based on external environmental changes impacting enterprise production and operation. China's current managerial context suggests a lack of long-term vision. Guided by sustainable development, long-term visioning is paramount for enterprises to resist external environmental threats and maintain sustainability. Thus, this study uses sample data of A-share non-financial listed companies from 2009 to 2020 to examine whether management's short-sighted behavior impacts enterprises' environmental, social, and governance (ESG) performance and its impact mechanism using a measurement index of management's short-sighted behavior that includes "qualitative + quantitative" methods. The heterogeneity of this impact based on managers with different backgrounds and senior management team structure is discussed. Our research indicates that management's myopic behavior can significantly inhibit ESG performance. This conclusion is still robust after considering endogeneity and multiple robustness tests. The inhibitory effect is markedly evident in enterprises with no background of poverty and with no overseas experiences; at the same time, this negative effect is more obvious in the executive team with low gender heterogeneity and no professional background in management. Mechanism analysis indicates that management's shortsighted behavior inhibits enterprises' ESG performance by reducing capital expenditure and green innovation performance. This study provides empirical support and theoretical evidence for enterprises to improve their ESG performance while offering insights for enterprises in developing countries to implement ESG practices.