Abstract

With the improvement of financial leverage, enterprises will face more severe financial difficulties and more stringent external supervision. Enterprises tend to take a high-intensity strategic change to get rid of the trouble. Taking China's A-share manufacturing listed companies from 2008-2018 as the research sample, based on the theory of enterprise behavior and faultlines theory, this paper explores the impact of corporate financial leverage on strategic change and the moderating effect of the top management team (TMT) educational-level faultline strength. The results show that there is a positive correlation between corporate financial leverage and strategic change. TMT educational-level faultline strength negatively moderates the positive correlation between corporate financial leverage and strategic change. The existence of an educational-level faultline makes it difficult for the whole TMT to form a consensus of change. Our study suggests that improving the matching degree of education characteristics of TMT is the basic condition for enterprises to implement high-intensity strategic change.

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