The Impacts of the CEO’s Network Effect on Digitalization and Agile Leadership in China

Xihui Chen, Victor Chang, Patricia Baudier, Kienpin Tee

2022

Abstract

Digitalization as a business enabler has speeded and scaled innovation in many firms. As the corporate leader, the CEO is there to set the stage for a learning process that facilitates strategic agility and enhances network effects to create value. This study uses innovation efficiency as the proxy of digitalization to examine the contribution of the CEO networks to firm-level innovation efficiency in Chinese listed firms. We apply a frontier analysis approach (e.g., DEA and SFA) and measure innovation efficiency based on the scale ratio of innovation output (i.e., patent counts) and input (R&D investment and R&D personnel). First, we find that innovation is more efficient when CEO has more outside directorships by considering 13,516 firm-year observations in Chinese listed high-tech firms between 2007 and 2017. Second, a significant and positive relationship exists between a well-connected CEO and innovation efficiency when the newly appointed CEO has larger networks than the predecessor. Third, it is found out that the positive correlation between a well-connected CEO and innovation efficiency will become non-significant when the number of outside directorships is above the yearly median level. This empirical study provides evidence for the network effects of a CEO for improving innovation efficiency. The findings emphasize the contingent value of the CEO's external social capital on agility, especially the multiple directorships in a transitional economy.

Paper Citation

in Harvard Style

Chen X., Chang V., Baudier P. and Tee K. (2022). The Impacts of the CEO’s Network Effect on Digitalization and Agile Leadership in China. In Proceedings of the 4th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB, ISBN 978-989-758-567-8, pages 43-54. DOI: 10.5220/0011049400003206

in Bibtex Style

@conference{femib22,
author={Xihui Chen and Victor Chang and Patricia Baudier and Kienpin Tee},
title={The Impacts of the CEO’s Network Effect on Digitalization and Agile Leadership in China},
booktitle={Proceedings of the 4th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB,},
year={2022},
pages={43-54},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0011049400003206},
isbn={978-989-758-567-8},
}

in EndNote Style

TY - CONF

JO - Proceedings of the 4th International Conference on Finance, Economics, Management and IT Business - Volume 1: FEMIB,
TI - The Impacts of the CEO’s Network Effect on Digitalization and Agile Leadership in China
SN - 978-989-758-567-8
AU - Chen X.
AU - Chang V.
AU - Baudier P.
AU - Tee K.
PY - 2022
SP - 43
EP - 54
DO - 10.5220/0011049400003206