Managerial overconfidence and corporate digital transformation

Li Zhang and Xinwei Song

Finance Research Letters, 2025, vol. 75, issue C

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.

Keywords: Managerial overconfidence; Corporate digital transformation; Financing constraints; Board governance; Innovation capacity (search for similar items in EconPapers)
JEL-codes: G34 M12 O32 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s1544612325000935

DOI: 10.1016/j.frl.2025.106828

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