Can government subsidies for the digital economy promote corporate innovation?

Xiangli Wan and Haidong Ding

European Journal of Innovation Management, 2024, vol. 28, issue 7, 2995-3023

Abstract: PurposeThe purpose of this study is to empirically explore the impact of government subsidies for the digital economy on corporate innovation. It aims to determine whether these subsidies promote innovation, and to examine the specific ways in which they inspire corporate innovation.Design/methodology/approachThis study selects Chinese A-share listed companies during the period from 2007 to 2019 as the research object. It employs panel data to empirically examine the impact of government subsidies in the digital economy on corporate innovation.FindingsThe findings reveal that government subsidies for the digital economy effectively promote corporate innovation. They significantly increase the number and share of invention patents and improve the quality of corporate innovation. Moreover, it is noted that the positive impact is largely confined to non-state-owned enterprises, small firms and those in highly competitive markets.Originality/valueThe contribution of this paper lies in focusing on government subsidies in the digital economy, which is distinct from the general government subsidies in a broad sense.

Keywords: Digital economy; Government subsidy; Corporate innovation; Innovation quality; Innovation resource (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ejimpp:ejim-04-2024-0375

DOI: 10.1108/EJIM-04-2024-0375

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