Can a More Stable Top Management Team Enable Digital Innovation? Evidence from China

Considering the leadership role of top management team (TMT) in the implementation of corporate digital strategy, we use a sample of Chinese A-share listed companies from 2012 to 2020 to test the impact of TMT stability on corporate digital innovation. We find that as TMT stability improves, the level of corporate digital innovation increases significantly. Moreover, a stable TMT can promote digital innovation by easing financial distress, encouraging risk-taking strategies, curbing executive power abuse and attracting analyst attention. This result is more pronounced in companies with higher-quality internal control systems, higher levels of industry concentration and more institutional investor ownership