The impact of digital infrastructure on urban radical innovation: Evidence from the “Broadband China” Demonstration Policy

Xinpeng Wang and Yingying Zhang

International Review of Financial Analysis, 2025, vol. 106, issue C

Abstract: This study explores the influence of digital infrastructure (DI) on urban radical innovation (RI) by exploiting the “Broadband China” demonstration policy as a quasi-natural experiment and applying a spatial Difference-in-Differences (DID) model. We find that the DI promotes RI, and this effect is further strengthened by local government's digital focus. Mechanism analysis identifies three key channels: the advancement of the digital economy, increased virtual agglomeration, and optimization of commercial credit environment. Heterogeneity assessment indicates that the positive effect is more substantial in eastern cities, cities exhibiting advanced marketization, and cities with better intellectual property protection. Our findings offer valuable perspectives and policy-oriented insights for emerging economies aiming to foster RI through DI advancement.

Keywords: Digital infrastructure; “Broadband China” policy; Government’s digital focus; Radical innovation (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:106:y:2025:i:c:s1057521925006155

DOI: 10.1016/j.irfa.2025.104528

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