Navigating the Digital Frontier : The Role of Corporate Governance in Shaping Digital Orientation in China

In today's digital age, digital orientation is of paramount importance for businesses. Businesses that are not digitally oriented will be at a competitive disadvantage. This research paper examines the effects of corporate governance structures on digital orientation of Chinese corporations listed on the Shanghai and Shenzhen stock exchanges. Using a comprehensive dataset and a longitudinal design from 2010 to 2019, the study finds that larger board sizes, more frequent board meetings, and CEO-chair duality are positively associated with firms' digital orientation. However, the presence of outside directors does not significantly relate to increased digital orientation. These findings suggest that robust corporate governance practices exhibited through board characteristics, such as board constitution, active board engagement and leadership structure, can help to deter opportunistic behavior by managers, facilitate resource acquisition, and promote the development of effective digital strategies. Significantly, the study outcomes are validated through a battery of rigorous tests, including alternate proxy for digital orientation, instrumental variable methods and sysGMM as a dynamic panel technique. Finally, the findings provide valuable insights for practitioners, policymakers, and scholars interested in corporate governance and digital transformation