Technical founders, digital transformation and corporate technological innovation: empirical evidence from listed companies in China’s STAR market

Abstract

Technology entrepreneurship and corporate innovation are important for the development of indigenous innovation. In the digital age, founders are subject to fundamental changes in their strategy choices, which in turn affect corporate innovation performance. This paper aims to explore the strategic choices adopted by technical founders of listed companies in China’s STAR market to reap the rewards of innovation in a digital context. Based on the annual reports of 124 listed companies in China’s STAR Market, this paper applies machine learning methods to quantify digital transformation of enterprises, and empirically analyzes the relationship between technical founders and innovation performance by constructing a moderated mediating model. Our results show that companies with technical founders are more likely to adopt digital transformation and thus show better innovation performance. In terms of heterogeneity, the empirical results demonstrate that firms with technical founders show better performance in digital transformation, followed in turn by those with business founders and academic founders. Both the positive relationship between enterprise digital transformation and innovation performance and the mediating effect of digital transformation are positively moderated by venture capital or private equity support. The findings reveal the microscopic mechanism of the role of technology-based founders on corporate innovation performance and hence have practical implications for promoting corporate digital transformation and enhancing firm technological innovation.

The impact of population aging on SME digital transformation: Evidence from China

“…Referring to Li et al [ 50 ], we use the Chinese pre-trained BERT model to construct the word vector for each initial digital transformation keyword. Subsequently, we extract words from the annual report vocabulary that have 80% similarity to the digital transformation word vectors and filter 42 additional keywords representing the digital transformation of SMEs.…”

Corporate digital transformation, internal control and total factor productivity

“…As a major strategy for high-quality development, digital transformation is more likely to be reflected in annual reports with summary and guidance [ 45 ]. With reference to Yuan et al (2021) [ 19 ], Xiao et al (2022) [ 46 ], and Li et al (2023) [ 47 ], text analyses are adopted to obtain the degree of digital transformation (DIGIT). Firstly, based on the semantic expression of national policies related to digital economy, the websites of the State Council, and the Ministry of Industry and Information Technology are searched, to obtain 32 important national digital economy-related policy documents released during 2012–2021, and extract keywords related to digitalization.…”

“…To mitigate the endogeneity caused by reverse causation, with reference to Liu et al (2021) [ 67 ], Instrumental variable method is adopted for analyses. Meanwhile, based on diversification measure, with reference to Wu et al (2021) [ 45 ], and Li et al (2023) [ 47 ], Python technologies are utilized to summarize the occurrence frequencies of the characteristic words related to artificial intelligence, blockchain, cloud computing, big data and digital technology applications from annual reports. The greater the total frequencies of these characteristic words, the higher the degree of digital transformation.…”

Entrepreneurial innovations and trends: A global review: Examining emerging trends, challenges, and opportunities in the field of entrepreneurship, with a focus on how technology and globalization are shaping new business ventures

“…In the context of China's STAR market, the relationship between technical founders, digital transformation, and corporate technological innovation provides empirical evidence of how technology shapes entrepreneurship. Companies with technical founders are more likely to adopt digital transformation strategies, leading to better innovation performance (Li, Wu and Li, 2023). This indicates that the strategic choices of founders, especially in the digital age, have a profound impact on corporate innovation.…”