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Digital product trade liberalization and enterprises’ digital innovation in China——Evidence from the ITA expansion

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  • Li, Zhen
  • Chai, Fan
  • Han, Jinrong

Abstract

This paper investigates the impact of the Information Technology Agreement (ITA) expansion on enterprises’ digital innovation, utilizing a sample of Chinese listed firms between 2013 and 2019. We find that tariff reduction of IT products increases digital innovation activities of enterprises. Our results suggest two mechanisms through which the trade liberalization of IT products promotes enterprises’ digital innovation, one is to ease firms’ financial constraints and the other is to improve market competition. Our findings contribute to the growing literature examining the real impacts of IT product trade liberalization.

Suggested Citation

  • Li, Zhen & Chai, Fan & Han, Jinrong, 2025. "Digital product trade liberalization and enterprises’ digital innovation in China——Evidence from the ITA expansion," Finance Research Letters, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:finlet:v:80:y:2025:i:c:s1544612325005367
    DOI: 10.1016/j.frl.2025.107273
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • F1 - International Economics - - Trade
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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