Managerial Myopia and Digital Innovation: The Mechanism of Deviant Strategy

Based on the time-oriented theory, this research uses panel data of publicly listed enterprises in the Shanghai and Shenzhen Stock Exchanges of China spanning from 2010 to 2023 to empirically analyze how managerial myopia affects digital innovation. The research indicates that the myopic behaviour of managers substantially hinders the digital innovation efforts of enterprises. Myopic managers are more prone to deviate from strategies initially beneficial for the enterprise's long-term growth, often manifested through decreased investment in research and development. This shift in resource allocation can impede the progress of digital innovation through reallocation mechanisms. To a certain extent, intense market competition mitigates the negative impact of managerial myopia on digital innovation. Conversely, government subsidies may exacerbate the detrimental effects of myopic managers on digital innovation. Additionally, the perception of economic policy uncertainty can also alleviate the restraint imposed by managerial myopia on digital innovation. These results can optimize the internal governance mechanism of enterprises, helping to overcome the managerial myopia and promote long-term innovation and development.