The Impact of Executive Equity Incentives on Corporate Digital Transformation: Facilitating or Inhibiting
DOI:
https://doi.org/10.54097/r0e8sa85Keywords:
Executive equity incentives; digital transformation; inverted “U” shape.Abstract
From the perspective of executive equity incentives, this paper utilizes the data of A-share listed companies in Shanghai and Shenzhen from 2007 to 2021 to explore the impact of executive equity incentives on the digital transformation of enterprises. It is found that, firstly, executive equity incentives have an inverted “U” shape impact on enterprise digital transformation, with an inflection point value of 35.17%, and the conclusion still holds after a series of tests. Second, the mechanism test shows that executive equity incentives affect the digital transformation of enterprises through two paths: financing ability and risk-taking ability. Third, the heterogeneity test finds that the effect of executive equity incentives on enterprise digital transformation is more significant in state-owned enterprises and enterprises with dispersed equity. The findings of this paper not only provide empirical evidence for the promotion of enterprise digital transformation, but also provide useful insights for the improvement of enterprise equity incentive mechanism.
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