The dual effects of CEO social capital on sustainability: an empirical study of Chinese companies

This paper investigates the dual nature of Chief Executive Officer (CEO) social capital in shaping firm sustainable development performance (SDP). Drawing on social capital and upper echelons theories, we propose that CEO networks generate both resource-enabling effect that fosters sustainability and governance-cost effect that constrains it. Using panel data from Chinese listed companies spanning 2010–2022, we employ feasible generalized least squares estimation to test our hypotheses. We also used fixed effects models, instrumental variable methods, and Heckman two-stage models for robustness testing. Our analysis reveals context-dependent U-shaped and inverted N-shaped relationships between CEO social capital and firm SDP. Furthermore, CEO power amplifies the governance-cost effect of social capital, while media attention mitigates it. Similarly, financing constraints strengthen the resource-enabling effect, whereas regional market completeness weakens it. This study contributes to social capital theory by unveiling the dual-pathway mechanism through which CEO social capital influences sustainability, and provides practical guidance for optimizing leadership network management in the pursuit of excellence and sustainable development.