Abstract
Given the development of the digital economy, the shift to digitalization is an inevitable direction for corporate strategic planning. This empirical study investigates the impact of corporate digital strategic orientation on innovation output. It also examines the moderating effects of executive equity and compensation incentives on the relationship between corporate digital strategic orientation and innovation output. We selected a sample of Chinese listed companies and adopted the Heckman two-stage and two-stage least square (2 S LS) methods to control for potential endogenous problems. Our findings indicate that corporate digital strategic orientation significantly enhances innovation output. Additionally, we found that executive compensation and equity incentives positively moderate the impact of corporate digital strategic orientation on innovation output, with equity incentives having a greater moderating effect than compensation incentives. Further analysis shows that the impact of corporate digital strategic orientation on innovation output is greater in non-manufacturing industries and non-state-owned enterprises. Our study provides policy insights on how companies can enhance their innovation capability in the digital economy.