Digital transformation is a new development opportunity available to enterprises in the digital economy and represents a comprehensive application of digital technology in production, operation, and management. This study examined the impact of Chief Executive Officer (CEO) discretion on enterprise digital transformation using data from 2007 to 2022 of A-share listed companies in Shanghai and Shenzhen exchanges in China. The results suggest that CEO discretion enhances digital transformation performance, and the degree of CEO self-confidence plays a moderating role. The greater the degree of CEO self-confidence, the stronger the impact on digital transformation. Sex, age, educational background, and experience in finance affect discretionary powers of CEOs and its effect on digital transformation. The mechanism test revealed that corporate financialisation and technological innovation investment can play a mediating role. Additional analysis revealed that the facilitative effect of CEO discretion on digital transformation is stronger for non-state and large firms. This study enriched and expanded the behavioural theory in finance and related research on the factors influencing corporate digital transformation and provided empirical evidence on how firms can follow the digital development trends and accelerate the process of corporate digital transformation.
Keywords: CEO discretion; CEO overconfidence; Corporate financialisation; Digital transformation; Technology innovation investment.
© 2023 The Authors. Published by Elsevier Ltd.