Top management team background heterogeneity, incentive arrangements, and corporate digital transformation: insights from listed manufacturing companies in China

Using a panel of listed manufacturing companies from 2015 to 2024, this study examines how top management team (TMT) background heterogeneity and incentive arrangements relate to corporate digital transformation in China. We combine same-year two-way fixed-effects regressions, a one-period-lagged nonlinear fixed-effects model, and interpretable machine learning analysis. The same-year fixed-effects results show no statistically discernible average linear associations for the TMT variables. In the lagged nonlinear model, managerial ownership displays an inverted-U-shaped association with subsequent digital transformation. The GBRT analysis ranks managerial ownership, TMT compensation level, age heterogeneity, and career heterogeneity among the more informative TMT-related predictors. These findings highlight how TMT characteristics relate to corporate digital transformation and offer implications for interpreting TMT characteristics and incentive arrangements.