Millennial executives: effects of the age-inverse relationship in CEO–top management team on corporate misconduct in China’s construction industry

Purpose This study examines whether and how the age-inverse relationship between the chief executive officer (CEO) and the top management team (TMT) affects corporate misconduct in China’s construction industry. Drawing on social identity theory, we propose that the age-inverse relationship in CEO–TMT may diminish their social identity and further decrease the likelihood of corporate misconduct in construction firms. Design/methodology/approach Using a longitudinal dataset of firms in China’s construction industry covering the years 2003 through 2021, this study adopted a logit regression model with fixed effects. Findings The results show that the age-inverse relationship in CEO–TMT is negatively related to corporate misconduct. Further investigations suggest that performance feedback moderates the relationship between the age-inverse relationship in CEO–TMT and corporate misconduct. Firms with an age-inverse relationship between CEOs and TMTs are more likely to engage in fraudulent behavior when performance is above aspirations and less likely to commit fraud when performance is below aspirations. Research limitations/implications The sample of this study is limited to China’s construction firms. Drawing on social identity theory, this study explores the relationship between the age-inverse relationship and corporate misconduct in China’s construction industry, which enriches the antecedents of corporate misconduct and contributes to CEO–TMT interface research within construction firms. Practical implications This study provides a guideline for construction firms on how to regulate and reduce misconduct. It will offer insights into human resource arrangements within the management of construction firms in an aging context. Originality/value Considering that few studies explore fraudulent behavior of construction companies at the upper echelon level, this study focuses on a novel and new antecedent (i.e. age-inverse relationship in CEO–TMT) and its boundary conditions. The findings extend the research on corporate misconduct and strategic leadership in the construction industry.