Affiliation:
1. School of Management Huazhong University of Science and Technology Wuhan 430074 China
2. Hefei Advanced Research Institute Anhui University of Finance and Economics Bengbu 233017 China
Abstract
AbstractThis study examines whether digital transformation can reduce research and development (R&D) investment disruption during the top executive transition period. Using panel data of A‐listed firms in China from 2007 to 2021, we find that top executive turnover (TET) generally leads to a remarkable reduction in R&D investment, while digital transformation can significantly mitigate the negative impact of TET on R&D investment. Moreover, the smooth management transition effect of digital transformation is more pronounced for firms with outside succession and high organizational complexity. We further divide R&D investments into exploratory and exploitative R&D investments. Compared to exploitative R&D investment, exploratory R&D investment is more adversely affected by TET, and digital transformation has a positive moderating effect on the relationship between them. Our findings suggest that digital transformation enables companies to maintain continuous R&D investment during the top executive transition by improving communication efficiency and enhancing organizational learning.