CEO's functional experience and firm performance based on text mining.

The impact of a chief executive officer's (CEO's) functional experience on firm performance has gained the attention of many scholars. However, the measurement of functional experience is rarely disclosed in the public database. Few studies have been conducted on the comprehensive functional experience of CEOs. This paper used the upper echelons theory and obtained deep-level curricula vitae (CVs) data through the named entity recognition technique. First, we mined 15 consecutive years of CEOs' CVs from 2006 to 2020 from Chinese listed companies. Second, we extracted information throughout their careers and automatically classified their functional hierarchy. Finally, we constructed breadth (functional breadth: functional experience richness) and depth (functional depth: average tenure and the hierarchy of function) for empirical analysis. We found that a CEO's breadth is significantly negatively related to firm performance, and the quadratic term is significantly positive. A CEO's depth is significantly positively related to firm performance, and the quadratic term is significantly negative. The research results indicate a u-shaped relationship between a CEO's breadth and firm performance and an inverted u-shaped relationship between their depth and firm performance. The study's findings extend the literature on factors influencing firm performance and CEOs' functional experience. The study expands from the horizontal macro to the vertical micro level, providing new evidence to support the recruitment and selection of high-level corporate talent.