Benefits of managerial overconfidence for corporate digital transformation: Evidence from China.
This article studies how managerial overconfidence shapes a firm's digital transformation and unpacks the pathway and the boundary condition. Using a sample of Chinese listed firms between 2011 and 2022, we find that managerial overconfidence exhibits a positive relationship with corporate digi...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Public Library of Science (PLoS)
2024-01-01
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| Series: | PLoS ONE |
| Online Access: | https://doi.org/10.1371/journal.pone.0314231 |
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| _version_ | 1850129353730424832 |
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| author | Yi Jin Chuxin Chen Bo Liu |
| author_facet | Yi Jin Chuxin Chen Bo Liu |
| author_sort | Yi Jin |
| collection | DOAJ |
| description | This article studies how managerial overconfidence shapes a firm's digital transformation and unpacks the pathway and the boundary condition. Using a sample of Chinese listed firms between 2011 and 2022, we find that managerial overconfidence exhibits a positive relationship with corporate digital transformation and the relationship is mediated by R&D investment. In addition, we demonstrate that compared to state-owned companies, R&D investment has a more significant positive effect on digital transformation in non-state-owned companies. This study contributes novel insights about the consequences of cognitive biases of top managers and extends the studies for investigating top managers in the digital transformation age. The findings offer implications for top managers who have to fully recognize the impact of overconfidence on the development of the companies and the impact of overconfident executives on corporate digital transformation depending on R&D investment to create value. In addition, this study also reminds Chinese policymakers to improve the efficiency of converting R&D investment into digital transformation in state-owned enterprises. |
| format | Article |
| id | doaj-art-cd10da92cd0145e3a213f918e1b77ee8 |
| institution | OA Journals |
| issn | 1932-6203 |
| language | English |
| publishDate | 2024-01-01 |
| publisher | Public Library of Science (PLoS) |
| record_format | Article |
| series | PLoS ONE |
| spelling | doaj-art-cd10da92cd0145e3a213f918e1b77ee82025-08-20T02:33:01ZengPublic Library of Science (PLoS)PLoS ONE1932-62032024-01-011911e031423110.1371/journal.pone.0314231Benefits of managerial overconfidence for corporate digital transformation: Evidence from China.Yi JinChuxin ChenBo LiuThis article studies how managerial overconfidence shapes a firm's digital transformation and unpacks the pathway and the boundary condition. Using a sample of Chinese listed firms between 2011 and 2022, we find that managerial overconfidence exhibits a positive relationship with corporate digital transformation and the relationship is mediated by R&D investment. In addition, we demonstrate that compared to state-owned companies, R&D investment has a more significant positive effect on digital transformation in non-state-owned companies. This study contributes novel insights about the consequences of cognitive biases of top managers and extends the studies for investigating top managers in the digital transformation age. The findings offer implications for top managers who have to fully recognize the impact of overconfidence on the development of the companies and the impact of overconfident executives on corporate digital transformation depending on R&D investment to create value. In addition, this study also reminds Chinese policymakers to improve the efficiency of converting R&D investment into digital transformation in state-owned enterprises.https://doi.org/10.1371/journal.pone.0314231 |
| spellingShingle | Yi Jin Chuxin Chen Bo Liu Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. PLoS ONE |
| title | Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. |
| title_full | Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. |
| title_fullStr | Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. |
| title_full_unstemmed | Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. |
| title_short | Benefits of managerial overconfidence for corporate digital transformation: Evidence from China. |
| title_sort | benefits of managerial overconfidence for corporate digital transformation evidence from china |
| url | https://doi.org/10.1371/journal.pone.0314231 |
| work_keys_str_mv | AT yijin benefitsofmanagerialoverconfidenceforcorporatedigitaltransformationevidencefromchina AT chuxinchen benefitsofmanagerialoverconfidenceforcorporatedigitaltransformationevidencefromchina AT boliu benefitsofmanagerialoverconfidenceforcorporatedigitaltransformationevidencefromchina |