Top management teams' digital experience and innovation efficiency: evidence from China

Purpose This study focuses on the relationship between top management teams' (TMTs) digital experience and company innovation efficiency. In addition, this study examines the mechanism role of digital transformation processes, including basic capability, chief information officer (CIO) appointments, process management and business management, on the relationship between TMTs' digital experience and innovation efficiency. Design/methodology/approach Based on the sample of China's A-share listed companies from 2011 to 2021, this article employs data envelopment analysis (DEA) and PSM-DID models to examine the effect of TMTs' digital experience on company innovation efficiency. Findings The TMTs' digital experience was positively correlated with company innovation efficiency. Artificial intelligence and digital platform are two key technologies that TMTs' digital experience effects company innovation efficiency. The financial ability of companies is a key factor to ensure the effectiveness of these two technologies. Digital foundation only played an important role in the early stages. In addition, TMTs' digital experience is more focused on technological management, not process management and business management. We also found that the CIO did not play a positive role on digital innovation. Finally, within the manufacturing industry and non-high-tech companies, the TMTs' digital experience has proven to be notably more effective in enhancing innovation efficiency. Practical implications This study advises that companies in the initial stages of digital transformation should give precedence to recruiting managers with digital experience into TMT, as their role is pivotal in propelling digital transformation in innovation. Futhermore, it is suggested that in the selection of TMT members, firms could consider dual appointments, such as CIO combined with other roles. Finally, this study recommends that TMTs with a digital background should pursue deeper technological competencies before embarking on corresponding business and process managements. Originality/value First, this study constructs a theoretical framework for examining how TMTs' digital experience influences innovation efficiency. Second, this study embedded the digital technology into the company innovation input index, elucidating how TMTs' digital experience directly enhances innovation efficiency. Finally, this study reveals how basic capability, CIO appointments, process management and business management affect the relationship between TMT digital experience and innovation efficiency.