Experts on the board: How do IT-savvy directors promote corporate digital innovation?

Abstract

Digital innovation has emerged as a pivotal driver for cultivating corporate competitive advantages; however, its successful implementation relies heavily on expert support. Utilizing panel data of A-share listed companies in China from 2008 to 2022, we find that IT-savvy directors can promote corporate digital innovation via facilitating digital transformation, mitigating managerial myopia, and enhancing industry-academia-research collaboration. Heterogeneity analyses indicate that IT-savvy directors’ promotive effect is more pronounced with higher director network centrality, board activeness, digital infrastructure maturity or intellectual property protection strength. Furthermore, we demonstrate that the promotion of corporate digital innovation ultimately leads to an increase in firm's market value. This study extends traditional innovation research into the digital context and provides valuable insights for optimizing corporate digital strategies and enhancing government digital economy policies.