Empowering corporate growth: How digital government enhances investment stability

Meiying Huang, Pengfei Cheng and Yimeng Yuan

Economic Analysis and Policy, 2025, vol. 87, issue C, 146-161

Abstract: This study employs the staggered difference-in-differences (DID) method to analyze data from Chinese A-share listed companies between 2008 and 2022. Using the reform of big data governance as a quasi-natural experiment, the study assesses the impact of digital government construction on corporate investment behavior and its underlying mechanisms. The empirical results indicate that digital government construction significantly fosters corporate investment. Its impact is particularly more pronounced in mature firms, state-owned enterprises, capital-intensive firms, and firms characterized by higher levels of digitalization. Additionally, the impact is greater in manufacturing companies and industries with higher levels of market competition. The mechanism analysis demonstrates that digital government increases corporate investment levels by lowering policy uncertainty, optimizing resource allocation, and increasing credit supply willingness. Furthermore, we discovered that digital government reforms significantly enhance corporate risk management capabilities and governance standards. Finally, our findings help to understand the critical role of digital government in corporate investment and provide insights for advancing digital government construction.

Keywords: Digital government; Corporate investment; Big data governance reform; China (search for similar items in EconPapers)
JEL-codes: E61 G31 H11 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:87:y:2025:i:c:p:146-161

DOI: 10.1016/j.eap.2025.06.004

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