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Digital infrastructure construction and firm violations: Evidence from a quasi-natural experiment in China

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  • Li, Sicheng
  • Guo, Jingjing
  • Xu, Qing

Abstract

Utilizing the Broadband China pilot policy as a quasi-natural experiment and employing a staggered difference-in-differences model, this study examines the impact of digital infrastructure construction on firm violations. The results show that digital infrastructure significantly inhibits firm violations. This effect is more pronounced in firms with greater information transparency, a higher proportion of highly educated employees, and stronger internal control quality. Our research extends the literature on the micro-level governance effects of digital infrastructure and informs policymakers seeking to optimize digital infrastructure deployment and enhance cross-departmental information integration to strengthen corporate supervision.

Suggested Citation

  • Li, Sicheng & Guo, Jingjing & Xu, Qing, 2026. "Digital infrastructure construction and firm violations: Evidence from a quasi-natural experiment in China," Finance Research Letters, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:finlet:v:87:y:2026:i:c:s1544612325022755
    DOI: 10.1016/j.frl.2025.109022
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    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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