TMT Demographic Characteristics, Social Capital And Firm Performance

Top Management Team (TMT) social capital is a new concept as the integration of corporate social capital theory and upper echelons theory. Owing to the lack of effective measurement method, the research on TMT social capital still stays on the level of theoretical analysis. On the basis of literature reviewing and the measurement of individual and collective social capital, this paper analyzes and summarizes the definition, properties and classification of TMT social capital, and constructs a second-order factor model of TMT external social capital and TMT internal social capital separately by structural equation modeling. On the basis of this work, I want to find out the effect of TMT Demographic Characteristics on the formation of social capita, and the effect of social capital on firm performance through empirical study. As a result, there're some useful conclusions. These findings are benefit for strengthen the upper echelons theory and corporate social capital theory, and has an important role for the guide for social practice.According to the needs of this research, I construct a second-order factor model of TMT external social capital and TMT internal social capital separately by structural equation modeling firstly. The paper was pointed out that the TMT social capital own micro and macro properties simultaneously. TMT external social capital is individual-level social capital, and TMT internal social capital is collective level social capital. Therefore we need to apply two different method systematically. Through analysis of existing individual and collective social capital, I think that TMT external social capital can measure by the network size, network density and network embedded resources. And TMT internal social capital can be divided into structural dimension, relations dimension and cognitive dimension, after design the concrete measure of various dimensions, two second-order factor measurement model including three dimensions and twelve index are constructed seperatebly for TMT internal social capital and TMT external social capital. Results show both model fit well overall, each construct passes the the reliability test and has high convergent validity as well as discriminant validity, the measurement model can measure TMT social capital stably and correctly, which is a conplex multi-dimension social concept. This paper will help promote the empirical study in the field of TMT social capital.After resolve the problem of the measurement of social capital, this paper focused on the analysis of the reasons for the formation of TMT social capital. I think that the demographic characteristics of TMT can affect the structure position in the social network, thereby affecting the formation of TMT social capital. Therefore,I analysis the effect of TMT demographic characteristics for the formation of TMT social capital, and through the empirical study of the mean and the heterogeneity of demographic characteristics of TMT separately. Empirical results show that team membership age, education level, output-oriented departments and more enterprises career background have significant promoting effect for the formation of external social capital. Graduate university background had no significant effect for the formation of external social capital. Production type sector employment background and the team re-appointed promoted the formation of internal social capital significantly. The heterogeneity of TMT age, education and tenure have significant negative impact for the formation of internal social capital, while the heterogeneity of education major and career background have no significant effect.At last, this paper empirically analyses the influence of TMT social capital on corporate performance. In the current study, about whether social capital can improve business performance has not been the same conclusion, this paper use TMT social capital instead of entrepreneurs as corporate social capital, and use corporate strategy performance instead of the traditional financial performance to fully assess the corporate performance, and use structural equation model instead of the traditional multiple regression analysis to examine the relationship of all variables to solve the above disputes. The result shows that both TMT external social capital and TMT internal social capital have no direct effect but significantly indirect effect on corporate financial performance. Specifically speaking, TMT external social capital promotes financial performance mainly via improving market performance, at the same time, also partly by stimulating innovation performance to affect market performance and then financial performance. While TMT internal social capital only has significantly positive effect on innovation performance, and through which to affect market performance and financial performance.This paper not only investigates the relationship between TMT demographic characteristics, social capital and corporate performance, but also extends the theory of the high level of management mechanism of social contact, and provide an new way for understand the "black box" of the process of demographic characteristics effect corporate performance.