The Moderating Role of Digital Transformation on the Relationship between CEOs’ Foreign Experience and Financing Constraints of Firms in China

Given the degree and effectiveness of corporate financing are the main factors of corporate economic growth, it is crucial to examine how to alleviate financing constraints. Drawing on signaling and resource-based view theories, this study analyses how a CEO’s foreign experience influences a firm’s financial constraints and explores the moderating role of digital transformation in the former relationship. Using panel data from Chinese A-share companies listed on the Shenzhen and Shanghai Stock Exchanges from 2011 to 2022, the sample firms of 21,267 firm-year observations were analyzed by fixed effect regression. The result indicates a significant negative correlation between CEOs’ foreign experience and financing constraints, supporting the signaling theory. The results also show that digital transformation can strengthen the relationship between CEOs’ foreign experience and corporates’ financial constraints through a moderating effect. This study provides an innovative perspective that enables companies to proactively address financial constraints and obtain more access to external finance. The findings are significant for promoting enterprises to cope with financing constraints.