The impact of corporate digital strategic orientation on innovation output

Xueyuan Fan; Shukuan Zhao; Bochen Zhang; Shuang Wang; Dong Shao

doi:10.1016/j.heliyon.2023.e16371

The impact of corporate digital strategic orientation on innovation output

Heliyon. 2023 May 19;9(5):e16371. doi: 10.1016/j.heliyon.2023.e16371. eCollection 2023 May.

Authors

Xueyuan Fan¹, Shukuan Zhao¹, Bochen Zhang¹, Shuang Wang², Dong Shao²

Affiliations

¹ School of Business and Management, Jilin University, Changchun 130022, China.
² School of Business, Northeast Normal University, Changchun 130022, China.

Abstract

Given the development of the digital economy, the shift to digitalization is an inevitable direction for corporate strategic planning. This empirical study investigates the impact of corporate digital strategic orientation on innovation output. It also examines the moderating effects of executive equity and compensation incentives on the relationship between corporate digital strategic orientation and innovation output. We selected a sample of Chinese listed companies and adopted the Heckman two-stage and two-stage least square (2 S LS) methods to control for potential endogenous problems. Our findings indicate that corporate digital strategic orientation significantly enhances innovation output. Additionally, we found that executive compensation and equity incentives positively moderate the impact of corporate digital strategic orientation on innovation output, with equity incentives having a greater moderating effect than compensation incentives. Further analysis shows that the impact of corporate digital strategic orientation on innovation output is greater in non-manufacturing industries and non-state-owned enterprises. Our study provides policy insights on how companies can enhance their innovation capability in the digital economy.

Keywords: Digital strategy orientation; Executive incentives; Innovation; State ownership.