Digital Transformation, Top Management Team Heterogeneity, and Corporate Innovation: Evidence from A Quasi-Natural Experiment in China

Digitalization has brought great changes to economic and social development, and corporate digital transformation has gradually become the focus of academic attention. We explore the economic impacts of digital transformation from the perspective of corporate innovation utilizing a sample of China's A-share listed manufacturing firms from 2008 to 2020, depending on the quasi-natural experiment of "Integration of Informatization & Industrialization". Using the difference-in-differences (DID) model, we document that the growth of innovation considerably tends to rise via corporate digital transformation, and top management team (TMT) heterogeneity plays a positively moderating role in this process. The findings are still reliable after the parallel trend test, PSM-DID, placebo test, and the test of excluding alternative explanations. Extended analyses find that the innovation incentive effect of digital transformation will enhance corporate value in the later stage. Our findings not only contribute to the advancement of the study in digital transformation, but also offer theoretical support and useful advice for furthering corporate digitalization and upgrading the mechanism for creative growth.