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Managerial overconfidence and corporate digital transformation

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  • Zhang, Li
  • Song, Xinwei

Abstract

This study employs sample data from publicly listed companies between 2007 and 2022 to examine how managerial overconfidence influences corporate digital transformation. The findings reveal that managerial overconfidence exerts a considerable adverse effect on digital transformation, which is further exacerbated under conditions of limited funding. The research indicates that managerial overconfidence impedes the digital transformation process by diminishing board governance and innovation capacity. Furthermore, the negative impact of managerial overconfidence is more pronounced in firms with a low proportion of institutional investor shareholding and those implementing CEO-Chair duality.

Suggested Citation

  • Zhang, Li & Song, Xinwei, 2025. "Managerial overconfidence and corporate digital transformation," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000935
    DOI: 10.1016/j.frl.2025.106828
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    More about this item

    Keywords

    Managerial overconfidence; Corporate digital transformation; Financing constraints; Board governance; Innovation capacity;
    All these keywords.

    JEL classification:

    • M12 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Personnel Management; Executives; Executive Compensation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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