The growth and development of a firm depend on its ability to innovate new products to the market. Innovation and management always need a great team to cooperate and work together to perform well.
This paper explores how demographic heterogeneity in top management team affects firm innovation and financial performance. Thus, the purpose of this paper is to empirically examine the effect of demographic heterogeneity (Functional, Educational, and Tenure) on top management team with regard to firm innovation and financial performance. This paper uses 150 industrial firms in Taiwan. Regression method is used and hierarchical regression analyses are presented to indicate that TMT heterogeneities have some important effects on firm innovation and financial performance. It was observed that Educational Heterogeneity is significantly correlated with the firm performance, while other heterogeneities were not. It is also observed that the Environmental Dynamism and Munificence have direct relationship with firm performance; however they have not moderating effects. This might be the cause of mixing two different scales.

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