CEO Regulatory Focus on Digital Transformation: Evidence from China

Digital transformationsw has become crucial for business to stay competitive in today's technology-driven world. Research shows CEOs' characteristics can influence firms' digital transformation, however, this work has not considered the role of CEO regulatory focus. In this paper, we build a framework to understand the relationship between CEO regulatory focus and firm's digital transformation. Build on regulatory focus theory, we argue that CEO promotion focus is positively associated with enterprise digital transformation, whereas CEO prevention focus is negatively associated with enterprise digital transformation. We further identify two contextual factors that moderating the relationship between CEO regulatory focus and digital transformation. Specifically, we find CEO power and economic policy uncertainty strengthen the relationship between CEO regulatory focus and enterprise digital transformation. We find strong support for our hypotheses in a sample of 2696 Chinese publicly listed firms between 2008 and 2023. Our findings have significant implications for understanding the role of CEO regulatory focus on digital transformation.