A Literature Review of Upper Echelons Theory

Abstract

In this paper, I review the literatures about Upper Echelons Theory. Specifically, I focus on the related theories, including agency theory, five-factor model, cognitive theory, and heterogeneity theory, and so on; and the economic influences of Upper Echelons Theory, including the corporate top management (team) and administrative officials. Prior studies show that corporate top management (team) characteristics has effect on corporate governance, information disclosure and tax avoidance, etc. Moreover, background such as education degree and major of administrative officials have significant effect on governance efficiency, and local firm decisions. Overall, this paper contributes to the further exploration of top management team.