CEO Horizon and Corporate Digital Transformation

This study explores the impact of CEO career horizon on corporate digital transformation. CEOs with shorter decision horizons may exhibit myopia and risk aversion, given their limited tenure to wait for long-term returns. Consequently, they are less inclined to promote digital transformation initiatives. Analyzing data from Chinese listed companies spanning the period from 2007 to 2020, our findings reveal a positive correlation between CEO horizon and digital transformation, confirmed through both baseline and 2SLS regressions. Additionally, we observe that the influence of CEO horizon on digital transformation is more pronounced in firms facing higher levels of environmental uncertainty and greater financial constraints. This paper contributes to the literature on corporate short-termism and digital transformation.