Digital Economy, Enterprise Financing and Innovation: A Quasi-natural Experiment of "Broadband China" Pilot Policy

Yan Zhu

doi:10.54097/hbem.v9i.9065

Authors

Yan Zhu

DOI:

https://doi.org/10.54097/hbem.v9i.9065

Keywords:

Digital Economy;

Abstract

Based on the digital economy and enterprise innovation, this paper uses the data of China's A-share listed companies from 2010 to 2021 to empirically test the influence of "Broadband China" and uses the multiphase DID model. The results show that the construction of "Broadband China" pilot cities significantly and steadily increased the level of enterprise innovation activities. Meanwhile, the mechanism test result verifies that the new development of digital economy can promote enterprise innovation output by easing the financing constraints. Further heterogeneity analysis shows that the innovation output activities of non-state-owned enterprises are more significantly affected by the development of digital economy, and the broadband China strategy mainly promotes gradual innovations, but has no significant impact on substantive innovations. The conclusions of this paper not only provide empirical support for promoting the construction of network infrastructure, but also enrich the research of digital economy.

Downloads

Download data is not yet available.

References

Bertani, F., Ponta, L., Raberto, M., Teglio, A., & Cincotti, S. (2021). The complexity of the intangible digital economy: an agent-based model. Journal of business research, 129, 527-540. https:// doi. org/ 10. 1016/ j. jbusres.2020.03.041.

Benner, M. J., & Tushman, M. L. (2003). Exploitation, exploration, and process management: The productivity dilemma revisited. Academy of management review, 28(2), 238-256. https:/ /doi. org/ 10. 5465/ amr.2003.9416096.

Chen, H., Zhong, T., & Lee, J. Y. (2020). Capacity reduction pressure, financing constraints, and enterprise sustainable innovation investment: Evidence from Chinese manufacturing companies. Sustainability, 12(24), 10472. https://doi.org/10.3390/su122410472.

Chen, Y., Wang, Y., Nevo, S., Benitez-Amado, J., & Kou, G. (2015). IT capabilities and product innovation performance: The roles of corporate entrepreneurship and competitive intensity. Information & Management, 52(6), 643-657. https://doi.org/10.1016/j.im.2015.05.003.

Cohen, W. M., & Levinthal, D. A. (1990). Absorptive capacity: A new perspective on learning and innovation. Administrative science quarterly, 128-152. https://doi.org/10.2307/2393553.

Czarnitzki, D., & Hottenrott, H. (2011). R&D investment and financing constraints of small and medium-sized firms. Small business economics, 36, 65-83. https://doi.org/10.1007/s11187-009-9189-3.

Hadlock, C. J., & Pierce, J. R. (2010). New evidence on measuring financial constraints: Moving beyond the KZ index. The review of financial studies, 23(5), 1909-1940. https://doi.org/10.1093/rfs/hhq009.

He, Z. L., & Wong, P. K. (2004). Exploration vs. exploitation: An empirical test of the ambidexterity hypothesis. Organization science, 15(4), 481-494. https://doi.org/10.1287/orsc.1040.0078.

Holmstrom, B. (1989). Agency costs and innovation. Journal of Economic Behavior & Organization, 12(3), 305-327. https://doi.org/10.1016/0167-2681(89)90025-5.

Jia, X., Xie, B., & Wang, X. (2023). The impact of network infrastructure on enterprise digital transformation--A quasi-natural experiment from the “broadband China” Strategy. Applied Economics, 1-18. https://doi.org/10.1080/00036846.2023.2176450.

Li, R., Rao, J., & Wan, L. (2022). The digital economy, enterprise digital transformation, and enterprise innovation. Managerial and Decision Economics, 43(7), 2875-2886. https://doi.org/10.1002/mde.3569.

Liu, C., & Wang, L. (2019). Does national broadband plan narrow regional digital divide? Evidence from China. Chinese Journal of Communication, 12(4), 449-466. https:// doi.org/ 10.1080/ 17544 750. 2019. 1609539.

Nambisan, S., Wright, M., & Feldman, M. (2019). The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes. Research Policy, 48(8), 103773. https://doi. org/10. 1016/j.respol.2019.03.018.

Pan, W., Xie, T., Wang, Z., & Ma, L. (2022). Digital economy: An innovation driver for total factor productivity. Journal of Business Research, 139, 303-311. https://doi.org/10.1016/j.jbusres.2021.09.061.

Peng, S., Jiang, X., & Li, Y. (2023). The impact of the digital economy on Chinese enterprise innovation based on intermediation models with financing constraints. Heliyon, 9(3). https://doi.org/ 10.1016/ j. heliyon. 2023.e13961.

Röller, L. H., & Waverman, L. (2001). Telecommunications infrastructure and economic development: A simultaneous approach. American economic review, 91(4), 909-923. 10.1257/aer.91.4.909.

Tang, Y., Wang, Y., & Tang, C. (2022). Digital Economy, Market Structure and Innovation Performance. China Industrial Economics, 10, 62-80. https://doi.org/10.1016/j.enpol.2022.112927.

Theilmann, C., & Hukauf, M. (2014). Customer integration in mass customisation: a key to corporate success. International Journal of Innovation Management, 18(03), 1440002. https://doi.org/ 10.1142/ S1363919614400027.

Vial, G. (2019). Understanding digital transformation: A review and a research agenda. The journal of strategic information systems, 28(2), 118-144. https://doi.org/10.1016/j.jsis.2019.01.003.

Wang, C., & Zhang, M. (2022). The road to change: Broadband China strategy and enterprise digitization. Plos one, 17(5), e0269133. https://doi.org/10.1371/journal.pone.0269133.

Wang, Q., & Wei, Y. (2023). Research on the Influence of Digital Economy on Technological Innovation: Evidence from Manufacturing Enterprises in China. Sustainability, 15(6), 4995. https://doi. org/ 10. 3390/ su15064995.

Xu, K., Geng, C., Wei, X., & Jiang, H. (2020). Financing development, financing constraint and R&D investment of strategic emerging industries in China. Journal of Business Economics and Management, 21(4), 1010-1034. https://doi.org/10.3846/jbem.2020.12727.

Yoo, Y., Henfridsson, O., & Lyytinen, K. (2010). Research commentary--the new organizing logic of digital innovation: an agenda for information systems research. Information systems research, 21(4), 724-735. https: //doi.org/10.1287/isre.1100.0322.

Zhang, X. (2021). Broadband and economic growth in China: An empirical study during the COVID-19 pandemic period. Telematics and Informatics, 58, 101533. https://doi.org/10.1016/j.tele.2020.101533.