Executive team faultlines, business diversification, and corporate substantive innovation

This study examines the impact of executive team faultlines on substantive innovation and the moderating roles of business diversification and environmental uncertainty using 2010-2022 data from China’s A-share listed companies. Key findings reveal that: Surface-level faultlines inhibit innovation while deep-level faultlines promote it; Business diversification amplifies the negative effect of surface-level faultlines but enhances the positive effect of deep-level faultlines; Environmental uncertainty strengthens the inhibitory effect of surface-level faultlines while weakening the promotive effect of deep-level faultlines; and these effects are more pronounced in non-regulated industries and high social-trust firms. The study provides new theoretical insights into how executive team structures influence innovation quality and offers practical implications for team optimization.