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Can place-based digital policy drive corporate digital technology innovation? Evidence from China

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  • Feng, Yuan
  • Nie, Changfei

Abstract

This paper examines the impact of place-based digital policy on corporate digital technology innovation (DTI), addressing an underexplored area in the literature on place-based policies and the drivers of DTI. While prior studies have focused primarily on traditional policy instruments and firm-level characteristics, the role of place-based digital policies in fostering corporate DTI remains insufficiently understood. Exploiting the establishment of national new-generation artificial intelligence innovation and development pilot zones (AIPZs) in China as an exogenous policy shock, and using a sample of Chinese A-share listed firms, we employ a multi-period difference-in-differences approach to identify the causal effect of the AIPZs policy on corporate DTI. The results show that the AIPZs policy significantly enhances firms' digital technology innovation. This effect is further strengthened by firms' digital transformation and executives’ digital backgrounds and operates through increased R&D investment, improved human capital, and reduced operating costs. Overall, these findings provide empirical evidence on the effectiveness of place-based digital policies and deepen our understanding of policy-driven digital innovation ecosystems.

Suggested Citation

  • Feng, Yuan & Nie, Changfei, 2026. "Can place-based digital policy drive corporate digital technology innovation? Evidence from China," Economic Modelling, Elsevier, vol. 155(C).
    • Handle: RePEc:eee:ecmode:v:155:y:2026:i:c:s0264999325004547
    DOI: 10.1016/j.econmod.2025.107459
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