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The impact of COVID-19 on corporate digital innovation in China: A study based on the DDD model

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  • Zheng, Panpan
  • Li, Zhen
  • Zhuang, Ziyin

Abstract

This study uses text analysis and machine learning methods to construct an index of firms' digital innovation, and employs the triple difference method (DDD) to empirically examine the impact of the COVID-19 on digital innovation of Chinese listed companies. We find that firms' digital innovation, particularly in terms of digital product innovation, has increased after the COVID-19 outbreak, and the promotion of COVID-19 on digital innovation is more pronounced among low-leverage, non-declining periods, and tertiary industry firms. Our results imply that despite the adverse effects brought about by the COVID-19, such as cash flows constrains and revenues reductions, the opportunities it presents for firms' digital innovation cannot be ignored.

Suggested Citation

  • Zheng, Panpan & Li, Zhen & Zhuang, Ziyin, 2024. "The impact of COVID-19 on corporate digital innovation in China: A study based on the DDD model," Finance Research Letters, Elsevier, vol. 59(C).
    • Handle: RePEc:eee:finlet:v:59:y:2024:i:c:s1544612323011261
    DOI: 10.1016/j.frl.2023.104754
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    1. I. V. Mitrofanova & O. A. Chernova & M. V. Pleshakova, 2025. "Impact of Investments in Fixed Capital on Innovative Development of Regions of the Southern Federal District," Regional Research of Russia, Springer, vol. 15(4), pages 696-705, December.
    2. Bai, Junhong & Cai, Qishuo & Yao, Nengzhi & Guo, Qiaozhe, 2025. "Government industrial priorities, public corporate governance and corporate innovation: A political push perspective," Economic Analysis and Policy, Elsevier, vol. 85(C), pages 1885-1900.
    3. Wu, Weiwei & Xiao, Ruicong, 2025. "Antecedent configurations toward technology search strategies in digital transformation: The joint impact of performance feedback, organizational slack and TMT regulatory focus," Technovation, Elsevier, vol. 144(C).
    4. Zeyu Gong & Xuexi Huo, 2024. "Assessing the Impact of Regional Integration Strategies on the Development of Urban Green Economies: A Study Based on an Empirical Analysis of Ten Major Urban Agglomerations," Sustainability, MDPI, vol. 16(8), pages 1-17, April.
    5. Li, Zhijun & Zhang, Runze & Li, Qingyi & Wang, Yuchen, 2025. "How does a closed social network facilitate the impact of blockchain on corporate digital innovation performance?," Journal of Business Research, Elsevier, vol. 191(C).
    6. Ziqiong He & Rongguang Zhang & Qiwen Qiu & Zhe Chen, 2024. "Research on industrial structure adjustment and spillover effect in resource-based regions in the post-pandemic era," PLOS ONE, Public Library of Science, vol. 19(1), pages 1-19, January.

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    JEL classification:

    • K30 - Law and Economics - - Other Substantive Areas of Law - - - General
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

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