In today’s rapidly evolving global economy, the role of chief financial officers (CFOs) has transcended traditional financial stewardship to include pivotal strategic leadership capabilities, particularly in driving digital transformation within corporations. Emerging research provides compelling evidence that CFOs’ overseas work experience significantly enhances firms’ capacity to navigate digital innovation and transformation processes. This phenomenon is especially salient within the uniquely complex and rapidly digitizing business environment of China, where the interplay of institutional, cultural, and market forces creates both challenges and opportunities for organizational change.
Grounded in the theoretical framework of the upper echelons theory, which posits that the background, experiences, and cognitive frameworks of top executives shape organizational outcomes, recent empirical findings elucidate how different forms of international exposure influence corporate digital transition (CDT). Notably, this new research highlights a crucial differentiation between overseas educational experience and overseas work experience among CFOs, elucidating a nuanced understanding often overlooked in prior strategic leadership literature.
While prior assumptions frequently suggested a generalized benefit from any kind of international experience, the study reveals that only CFOs possessing practical overseas work experience exert a significant, measurable influence on facilitating digital transformation. This insight underscores the imperative role that organizational learning in foreign business contexts plays in shaping managerial cognition and decision-making, as opposed to knowledge acquired solely through academic channels. The findings align with, and extend, recent calls in strategic leadership scholarship to disaggregate categories of international experience for more precise theoretical and empirical analysis.
A deeper investigation into the mechanisms at play was conducted via a mediation analysis, which unmasked two critical pathways through which internationally experienced CFOs drive digital innovation: the amplification of research and development (R&D) investments and the enhancement of corporate environmental, social, and governance (ESG) practices. This dual-channel mechanism reveals a sophisticated managerial strategy where technical capabilities and institutional alignment operate concurrently to facilitate sustainable innovation and digital capability-building.
The influence of international CFOs extends beyond simple functional roles, positioning them as institutional entrepreneurs within emergent market contexts. By importing governance norms, regulatory best practices, and managerial routines from advanced financial systems, these CFOs catalyze internal reform processes and stimulate digital competency accrual within firms that are often encumbered by entrenched governance traditions and risk-averse corporate cultures. Such entrepreneurial agency is particularly critical in China, where state ownership models, guanxi networks, and hierarchical governance structures introduce unique contextual variables into leadership dynamics.
While the empirical evidence is drawn from the Chinese institutional setting, the implications resonate broadly with global corporations seeking to optimize leadership strategies for digital transformation. The intricate relationships discovered between CFOs’ international work experience, ESG engagement, and R&D investment intensity provide an enriched theoretical lens that integrates sustainability and technological innovation—a synthesis increasingly emphasized in contemporary digital era research agendas.
The methodological rigor implemented in this research bolsters confidence in the findings. Detailed discussions of potential endogeneity, coupled with multiple robustness checks, substantiate the credibility of the causal links identified. Notably, this study challenges previous assertions in the literature that CEOs’ green credentials or experiences might hinder digital transformation processes by offering evidence that international experience among top financial executives positively correlates with digital advancements. This reframing contributes significantly to our understanding of the strategic value embedded within diverse leadership profiles.
Moreover, by building upon prior examinations of CFO personality traits such as narcissism, the current research broadens conceptual frameworks to encompass the influence of experiential factors beyond temperament or disposition. This presents a refined perspective acknowledging how practical international exposure equips CFOs with a broader strategic toolkit, enabling nuanced decision-making that integrates digital innovation and sustainable governance objectives.
From a strategic management viewpoint, these results emphasize the imperative for organizations—particularly those in emerging markets—to develop or recruit CFOs with substantial overseas work experience. Doing so not only accelerates digital transformation initiatives but also fortifies the firm’s commitment to ESG principles, fostering a competitive advantage grounded in global managerial expertise and sustainable business practices.
It is important, however, to acknowledge the study’s contextual and methodological limitations. The use of textual analysis techniques to quantify digital transformation, while validated, may raise concerns regarding indicator exogeneity and the replicability of results across distinct metrics or industries. Furthermore, restricting the sample to Chinese firms limits external validity, necessitating future research encompassing diverse geographical regions and industrial sectors to confirm the universality of these findings.
Looking ahead, there is a fertile avenue for investigations into boundary conditions that may moderate the observed relationships, such as differing ownership structures, political networks, regional digital governance policies, and cultural factors influencing leadership efficacy. Such inquiries would advance the contextualization of strategic leadership effects within the mosaic of organizational environments characteristic of globalized markets.
This research thus contributes a significant theoretical enrichment to studies of upper echelons, corporate governance, and digital transformation by intricately connecting CFO traits to firm-level innovation and sustainability outcomes. The dual mediation pathways unearthed herein offer a sophisticated model for understanding how international work exposure translates into concrete organizational change in the realms of R&D expansion and ESG integration.
In practical application, firms aiming to harness the full spectrum of digital opportunities should reconsider talent management and leadership development strategies. Prioritizing CFO candidates with substantive overseas work experience could act as a catalyst for blending innovation with sustainability goals, aligning organizational trajectories with the imperatives of the digital age and raising the bar for performance and institutional legitimacy.
Concurrently, policymakers and institutional actors should take note of the catalytic role these executives play in disseminating advanced governance norms into domestic markets, potentially informing regulatory frameworks and initiatives designed to stimulate digital capability diffusion and sustainable business transformation.
In summation, the emergent narrative from this body of work emphasizes that CFOs’ overseas work experience is not merely an additive facet of professional biography but a transformative lever for corporate digitalization and sustainability integration, especially within complex institutional milieus like China. This insight redefines our comprehension of strategic leadership dynamics in the digital era and underscores an actionable pathway for firms aspiring to thrive amid the convergence of technological disruption and global sustainability challenges.
Subject of Research: CFOs’ overseas work experience and its impact on corporate digital transformation and sustainability practices in the Chinese context.
Article Title: Can CFOs’ overseas experience contribute to corporate digital transformation: evidence from China.
Article References:
Wu, L., Xu, C., Qi, L. et al. Can CFOs’ overseas experience contribute to corporate digital transformation: evidence from China.
Humanit Soc Sci Commun 12, 870 (2025). https://doi.org/10.1057/s41599-025-05232-w
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