Digital product trade liberalization and enterprises’ digital innovation in China——Evidence from the ITA expansion

Zhen Li, Fan Chai and Jinrong Han

Finance Research Letters, 2025, vol. 80, issue C

Abstract: This paper investigates the impact of the Information Technology Agreement (ITA) expansion on enterprises’ digital innovation, utilizing a sample of Chinese listed firms between 2013 and 2019. We find that tariff reduction of IT products increases digital innovation activities of enterprises. Our results suggest two mechanisms through which the trade liberalization of IT products promotes enterprises’ digital innovation, one is to ease firms’ financial constraints and the other is to improve market competition. Our findings contribute to the growing literature examining the real impacts of IT product trade liberalization.

Keywords: IT product; Trade liberalization; Digital innovation; Market competition (search for similar items in EconPapers)
JEL-codes: F1 O3 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325005367

DOI: 10.1016/j.frl.2025.107273

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