The impact of managerial myopia on corporate ESG reputation risk: moderating role of digitization

This study examines the nexus between managerial myopia (MMY) and corporate Environmental, Social, and Governance reputation risk (ESGRR) among Chinese A-share listed firms from 2007–2022, as well as explore the role of digitalization (Dig) in this relationship. This study employs several analytical techniques to achieve its goals: ordinary least squares regression, poison regression, hackman two-stage, propensity score matching (PSM), and additional analyses. Different methodologies were used to validate the underlying association between MMY and ESGRR while controlling for potential endogeneity. The results confirm that MMY has the potential to amplify both the ESGRR’s scope (ESGRRS) and intensity (ESGRRI). Through moderating analysis, this study findings revels that corporate digitalization (Dig) can strengthen the link between managerial myopia and ESG reputation risk. The results from further analysis suggest that the positive association between MMY and ESGRR can mitigated for enterprises in which CEOs (a) have green experiences and (b) have strong political connections. The findings suggest that managerial myopia may become a challenge to corporate governance practices and may hinder achieving the goal of ESG reputation. With an explicit emphasis on Chinese firms, this study contributes to the ample disclosure of corporate sustainability by connecting managerial cognitive behaviors to ESGRR, thereby reinforcing the understanding of ESG-related activities in transition economies.