The Impact of TMT Digital Expertise on Firms’ Digital Innovation Performance

초록

This paper investigates the relationship between the top management team's digital expertise and firms' digital innovation performance, particularly in the quality dimension of innovation. Using panel data on 2,744 Chinese listed firms from 2010 to 2024, we estimate regression models with firm-fixed effects. The results show that the digital innovation quality achieved by firms the following year is higher when they have more top executives with career experience or expertise in digital technology. We further test boundary conditions that shape this relationship. First, higher levels of functional and professional diversity in the top management team enhance the positive relationship by providing complementary knowledge resources. Second, a stronger entrepreneurial risk-taking orientation of firms or their executives weakens the relation, because a high risk appetite will cause a dispersion of innovation efforts, thereby being detrimental to quality-oriented accumulations. Third, firm age negatively moderates the relationship, as organizational inertia can limit the implementation of digitally experienced executives' strategic vision. Fourth, the larger negative performance expectation gap relative to industry peers weakens the relationship by diverting managerial attention under the pressure of performance from long-horizon quality innovation to short-term remedial actions.

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