Do Rookie CEOs Reduce Corporate Environmental Investment? Evidence from China

This study investigates the impact of rookie CEOs on corporate environmental investment using panel data from Chinese listed firms between 2008 and 2023. The results show that rookie CEOs significantly reduce firms’ environmental spending. Mechanism analysis reveals two underlying channels: increased media attention amplifies external monitoring and reputational pressure, prompting rookie CEOs to cut long-horizon projects such as environmental investment; and rookie CEOs reinforce managerial myopia by prioritising short-term investments, thereby crowding out long-term sustainability projects. Heterogeneity analysis further shows that this effect is more pronounced in firms without vertical interlock, in male-dominated executive teams and in firms with older top management, whereas the effect weakens in firms with younger management teams. Overall, the findings highlight the importance of executive characteristics in shaping sustainable strategies and provide new insights into firms’ environmental investment behaviour.