How CEO digital embeddedness drives firm performance: evidence from the upper echelons theory

Purpose Many observations suggest that the firm performance relies heavily on chief executive officers (CEOs). To better understand this reliance in the digital era, we leverage the upper echelons theory to explore the relationships among CEO digital embeddedness, digital technology (DT) enabled top management team (TMT) creativity, entrepreneurial agility, and firm performance. Design/methodology/approach This study analyzes a sample of 189 Chinese firms. PROCESS macro in SPSS was employed to test the hypotheses. Findings CEO digital embeddedness is positively correlated with firm performance. Of three indirect paths for this relationship, the mediation of entrepreneurial agility is statistically significant, but that of DT-enabled TMT creativity is not significant, although the serial mediation of DT-enabled TMT creativity and the firm’s entrepreneurial agility is significant. Originality/value Our study contributes to the body of research on CEOs’ characteristics in the digital era by revealing the mechanisms through which the CEO digital embeddedness influences firm performance. Our findings also provide insights for CEOs to better understand how they should direct the evolution of their businesses.