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Digital government and corporate investment: Effects and mechanisms

Author

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  • Liu, Bofan
  • Guo, Ruifei
  • Shi, Huaqin

Abstract

Through a textual analysis of government work reports, this paper measures the level of digital government construction and examines its impact on corporate investment, along with the underlying mechanisms. The findings indicate that digital government development significantly promotes corporate investment by reducing uncertainty, administrative burdens, and information matching costs faced by enterprises. Moreover, the results suggest that digital policy initiatives, along with firms’ levels of digitalization and automation, exert a synergistic effect that amplifies this positive impact. These findings highlight the channels through which digital government influences corporate investment and underscore the importance of digital infrastructure development and the advancement of enterprise-level digital and automated capabilities.

Suggested Citation

  • Liu, Bofan & Guo, Ruifei & Shi, Huaqin, 2025. "Digital government and corporate investment: Effects and mechanisms," Economic Modelling, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001841
    DOI: 10.1016/j.econmod.2025.107189
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    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • D23 - Microeconomics - - Production and Organizations - - - Organizational Behavior; Transaction Costs; Property Rights

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