Balancing diversity and control: Top management team faultlines, CEO power, and innovation persistence in family enterprises

This study examines how Top Management Team (TMT) faultlines influence innovation persistence in Chinese family firms, with particular attention to the moderating role of CEO power. Using a panel dataset of family-owned enterprises listed on the Shanghai and Shenzhen stock exchanges from 2008 to 2022, we find a nonlinear, inverted U-shaped relationship between TMT faultlines—both social and task-related—and innovation persistence. Furthermore, CEO power significantly moderates this relationship, amplifying the effects of TMT dynamics on sustained innovation outcomes. The effect is especially pronounced in first-generation family firms. Our findings contribute to the literature on innovation and corporate governance by highlighting how internal team composition and leadership structures jointly shape long-term innovation strategies in emerging market contexts. The results offer practical implications for enhancing innovation persistence through effective TMT configuration and CEO leadership alignment.