IDEAS home Printed from https://ideas.repec.org/a/pal/palcom/v12y2025i1d10.1057_s41599-025-04614-4.html
   My bibliography  Save this article

Digital infrastructure construction and corporate innovation efficiency: evidence from Broadband China Strategy

Author

Listed:
  • Xuanwei Zhao

    (Asia-Australia Business College)

  • Fangzhu Dong

    (Victoria University Business School)

Abstract

Adopting the Broadband China Strategy as a quasi-natural experiment, we construct a multi-period Difference-in-Differences (DID) model to examine the impact of digital infrastructure construction on corporate innovation efficiency with panel data from Chinese listed companies between 2010 to 2022. Our findings indicate that the development of digital infrastructure significantly boosts corporate innovation efficiency. Mechanistic analysis reveals that financing constraints negatively moderates this innovation impact, while human capital positively moderates it. The effects of the Broadband China Strategy are particularly pronounced in non-state-owned enterprises, non-high-tech enterprises, and firms located in the non-eastern region of China. Our research provides important insights for enterprises seeking to enhance their innovation efficiency, while also offering strong empirical evidence on the role of digital infrastructure in fostering corporate innovation. Our study contributes to the literature on digital economy and innovation, with practical implications for policymakers and firms aiming to leverage digital infrastructure for sustained competitive advantage.

Suggested Citation

  • Xuanwei Zhao & Fangzhu Dong, 2025. "Digital infrastructure construction and corporate innovation efficiency: evidence from Broadband China Strategy," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-11, December.
    • Handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04614-4
    DOI: 10.1057/s41599-025-04614-4
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41599-025-04614-4
    File Function: Abstract
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1057/s41599-025-04614-4?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Qing Wang & Xingyu Xia & Sai Lan & Miao Li, 2023. "Rural Digital Infrastructure and Labor Market : Evidence from Universal Telecommunication Service," Post-Print hal-04348221, HAL.
    2. Clément de Chaisemartin & Xavier D'Haultfœuille, 2020. "Two-Way Fixed Effects Estimators with Heterogeneous Treatment Effects," American Economic Review, American Economic Association, vol. 110(9), pages 2964-2996, September.
    3. Hiro Izushi, 2008. "What Does Endogenous Growth Theory Tell about Regional Economies? Empirics of R&D Worker-based Productivity Growth," Regional Studies, Taylor & Francis Journals, vol. 42(7), pages 947-960.
    4. Lei Fan & Yunyun Zhang & Meilin Jin & Qiang Ma & Jing Zhao, 2022. "Does New Digital Infrastructure Promote the Transformation of the Energy Structure? The Perspective of China’s Energy Industry Chain," Energies, MDPI, vol. 15(23), pages 1-18, November.
    5. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-1177, September.
    6. Sun, Nan & Kong, Dongmin & Tao, Yunqing, 2023. "Does broadband infrastructure affect corporate mergers and acquisitions? Quasi-natural experimental evidence from China," International Review of Financial Analysis, Elsevier, vol. 85(C).
    7. Enrico Moretti, 2021. "The Effect of High-Tech Clusters on the Productivity of Top Inventors," American Economic Review, American Economic Association, vol. 111(10), pages 3328-3375, October.
    8. Junjun Tang & Xing Zhao, 2023. "Does the new digital infrastructure improve total factor productivity?," Bulletin of Economic Research, Wiley Blackwell, vol. 75(4), pages 895-916, October.
    9. Ahn, Sang-Jin, 2020. "Three characteristics of technology competition by IoT-driven digitization," Technological Forecasting and Social Change, Elsevier, vol. 157(C).
    10. Sharon Poczter, 2017. "Rethinking the government as innovator: Evidence from Asian firms," Asia Pacific Journal of Management, Springer, vol. 34(2), pages 367-397, June.
    11. Chang, Wentao & Yin, Shanminhui & Yu, Mingwen & Teymurova, Vusala & Balabeyova, Narmina, 2023. "Impact of innovation on Corporate Social Responsibility: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1185-1194.
    12. Goodman-Bacon, Andrew, 2021. "Difference-in-differences with variation in treatment timing," Journal of Econometrics, Elsevier, vol. 225(2), pages 254-277.
    13. Ding, Chante Jian & Chen, Hang & Liu, Yin & Hu, Jin & Hu, Mingjun & Chen, Dong & Irfan, Muhammad, 2024. "Unleashing digital empowerment: Pioneering low-carbon development through the broadband China strategy," Energy, Elsevier, vol. 295(C).
    14. Wang, Liang, 2023. "Mitigating firm-level political risk in China: The role of multiple large shareholders," Economics Letters, Elsevier, vol. 222(C).
    15. Guanming He & Xiaorong Li & Jingbo Luo, 2023. "The impact of the Shanghai–Hong Kong stock market connection on corporate innovation: Evidence from mainland China," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(3), pages 3132-3161, July.
    16. Yang Liu & Yaojun Fan & Yifan Wang & Jiayu Huang & Hu Xun, 2024. "City innovation ability and internet infrastructure development: Evidence from the “Broadband China” policy," Bulletin of Economic Research, Wiley Blackwell, vol. 76(1), pages 121-146, January.
    17. Fenghua Wen & Shan Yang & Daohan Huang, 2023. "Heterogeneous human capital, spatial spillovers and regional innovation: evidence from the Yangtze River Economic Belt, China," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-13, December.
    18. Schade, Philipp & Schuhmacher, Monika C., 2022. "Digital infrastructure and entrepreneurial action-formation: A multilevel study," Journal of Business Venturing, Elsevier, vol. 37(5).
    19. Ning, Lutao & Wang, Fan & Li, Jian, 2016. "Urban innovation, regional externalities of foreign direct investment and industrial agglomeration: Evidence from Chinese cities," Research Policy, Elsevier, vol. 45(4), pages 830-843.
    20. Yi Che & Lei Zhang, 2018. "Human Capital, Technology Adoption and Firm Performance: Impacts of China's Higher Education Expansion in the Late 1990s," Economic Journal, Royal Economic Society, vol. 128(614), pages 2282-2320, September.
    21. Zhuo, Chengfeng & Chen, Jin, 2023. "Can digital transformation overcome the enterprise innovation dilemma: Effect, mechanism and effective boundary," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    22. Sudheer Chava & Vikram Nanda & Steven Chong Xiao, 2017. "Lending to Innovative Firms," The Review of Corporate Finance Studies, Society for Financial Studies, vol. 6(2), pages 234-289.
    23. Campello, Murillo & Graham, John R. & Harvey, Campbell R., 2010. "The real effects of financial constraints: Evidence from a financial crisis," Journal of Financial Economics, Elsevier, vol. 97(3), pages 470-487, September.
    24. Zhao, Meiyu & Zhang, Bo, 2023. "Credit corruption, financial constraint and corporate innovation: Evidence on China," Finance Research Letters, Elsevier, vol. 53(C).
    25. Piepponen, Amanda & Ritala, Paavo & Keränen, Joona & Maijanen, Päivi, 2022. "Digital transformation of the value proposition: A single case study in the media industry," Journal of Business Research, Elsevier, vol. 150(C), pages 311-325.
    26. Yuan Wu & Ziwei Li, 2024. "Digital transformation, entrepreneurship, and disruptive innovation: evidence of corporate digitalization in China from 2010 to 2021," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-11, December.
    27. Hsu, Po-Hsuan & Tian, Xuan & Xu, Yan, 2014. "Financial development and innovation: Cross-country evidence," Journal of Financial Economics, Elsevier, vol. 112(1), pages 116-135.
    28. Qing Wang & Xingyu Xia & Sai Lan & Miao Li, 2023. "Rural digital infrastructure and labor market: Evidence from universal telecommunication service," Asian Economic Journal, East Asian Economic Association, vol. 37(3), pages 293-325, September.
    29. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    30. Zhou, Fengxiu & Wen, Huwei & Lee, Chien-Chiang, 2022. "Broadband infrastructure and export growth," Telecommunications Policy, Elsevier, vol. 46(5).
    31. Ruiyang Ma & Boqiang Lin, 2023. "Digital infrastructure construction drives green economic transformation: evidence from Chinese cities," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    32. Wen Yue, 2022. "Foreign direct investment and the innovation performance of local enterprises," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 9(1), pages 1-9, December.
    33. Tai-Hsi Wu & Pei Ju Lucy Ting & Mei-Chen Lin & Chia-Chi Chang, 2022. "Corporate ownership and firm performance: a mediating role of innovation efficiency," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 31(4), pages 292-319, May.
    34. Yang, Mengjun & Zheng, Shilin & Zhou, Lin, 2022. "Broadband internet and enterprise innovation," China Economic Review, Elsevier, vol. 74(C).
    35. Jin, Xin & Ma, Baojie & Zhang, Haifeng, 2023. "Impact of fast internet access on employment: Evidence from a broadband expansion in China," China Economic Review, Elsevier, vol. 81(C).
    36. Wang, Lianghu & Shao, Jun, 2024. "The energy saving effects of digital infrastructure construction: Empirical evidence from Chinese industry," Energy, Elsevier, vol. 294(C).
    37. Aurora Liu Genin & Justin Tan & Juan Song, 2021. "State governance and technological innovation in emerging economies: State-owned enterprise restructuration and institutional logic dissonance in China’s high-speed train sector," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(4), pages 621-645, June.
    38. Horbach, Jens, 2008. "Determinants of environmental innovation--New evidence from German panel data sources," Research Policy, Elsevier, vol. 37(1), pages 163-173, February.
    39. Lingyue Qiu, 2023. "Does the construction of smart cities promote urban green innovation? Evidence from China," Applied Economics Letters, Taylor & Francis Journals, vol. 30(19), pages 2688-2696, November.
    40. Truant, Elisa & Broccardo, Laura & Dana, Léo-Paul, 2021. "Digitalisation boosts company performance: an overview of Italian listed companies," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    41. Call, Andrew C. & Campbell, John L. & Dhaliwal, Dan S. & Moon, James R., 2017. "Employee quality and financial reporting outcomes," Journal of Accounting and Economics, Elsevier, vol. 64(1), pages 123-149.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Limin Zhao & Xu Ma & Shi Jiao & Chengming Hu, 2025. "How WeChat groups enhance political trust in rural China: evidence from the China Rural Revitalization Survey," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-12, December.
    2. Meng Li & Yang Xu, 2025. "The Impact of Computing Infrastructure Construction on Innovation in Manufacturing Enterprises: Evidence from a Quasi-Natural Experiment Based on the Establishment of China’s National Supercomputing C," Sustainability, MDPI, vol. 17(19), pages 1-23, October.
    3. Ziqian Peng & Haiyang Zhang & Peng Zhou & Junlin Ren & Yanbai Chen, 2025. "Enterprise digital transformation and inefficient investment: from the perspective of diversified operations and environmental uncertainty," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-16, December.
    4. Li, Mengjie & Liang, Sunfan & Cheng, Cheng & Du, Weijian, 2025. "Digital infrastructure investment and carbon emissions reduction based on the Broadband China policy," Utilities Policy, Elsevier, vol. 95(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weilong Wang & Jianlong Wang & Haitao Wu, 2025. "Assessing the Impact of New Digital Infrastructure on Enterprise Green Transformation from a Triple Performance Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 5594-5633, March.
    2. Wang, Lianghu & Shao, Jun, 2024. "The energy saving effects of digital infrastructure construction: Empirical evidence from Chinese industry," Energy, Elsevier, vol. 294(C).
    3. Liu, Biao & Li, Yanfeng & Liu, Jipeng & Hou, Yufei, 2024. "Does urban innovation policy accelerate the digital transformation of enterprises? Evidence based on the innovative City pilot policy," China Economic Review, Elsevier, vol. 85(C).
    4. Luo, Lianfa & Cheng, Zhiming & Ye, Qingqing & Cheng, Yanjun & Smyth, Russell & Yang, Zhiqing & Zhang, Le, 2024. "Nonmonetary awards and innovation: Evidence from winning China's Top Brand Contest," China Economic Review, Elsevier, vol. 86(C).
    5. Xu, Kefan & Yuan, Peng & Yu, Renjie, 2025. "The effects of mixed ownership reforms on Chinese firms’ emissions," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 191-209.
    6. Wang, Kunlun & Zheng, Leven J. & Lin, Boqiang, 2024. "Demand-side incentives, competition, and firms’ innovative activities: Evidence from automobile industry in China," Energy Economics, Elsevier, vol. 132(C).
    7. Han Hu & Shihui Yang & Lin Zeng & Xuesi Zhang, 2024. "U.S.–China trade conflicts and R&D investment: evidence from the BIS entity lists," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-15, December.
    8. Saige Wang & Chenchen Zhai & Yunxiao Zhang, 2024. "Evaluating the Impact of Urban Digital Infrastructure on Land Use Efficiency Based on 279 Cities in China," Land, MDPI, vol. 13(4), pages 1-24, March.
    9. Li, Donghui & Li, Yuan & Yuan, Chun, 2025. "Broadband policy and bank loans," Pacific-Basin Finance Journal, Elsevier, vol. 90(C).
    10. Zheng, Qianwen & Liu, Zilan & Zhang, Yunxiao, 2024. "Does public pension promote or inhibit enterprise total factor productivity? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 84(C), pages 1690-1713.
    11. Brick, Kerri & De Martino, Samantha & Visser, Martine, 2023. "Behavioural nudges for water conservation in unequal settings: Experimental evidence from Cape Town," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    12. Di Wang & Wei Dou & Jiajun Ning, 2025. "Can new infrastructure construction facilitate low-carbon energy transition? A quasi-natural experiment based on China’s smart city pilots," Economic Change and Restructuring, Springer, vol. 58(2), pages 1-35, April.
    13. Wenjie Zhang & Xianqiang Zou & Chuliang Luo & Lulu Yuan, 2024. "Hukou reform and labor market outcomes of urban natives in China," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(2), pages 1-41, June.
    14. Xinchun Zhang & Dong Liang & Shuo Zhang, 2025. "The Impact of Digital–Financial Dual Pilot Policy on Carbon Emission Efficiency: Evidence from Chinese Cities," Land, MDPI, vol. 14(4), pages 1-31, March.
    15. Wei-Fong Pan, 2023. "Does a firm’s lobbying activity respond to its peers’ lobbying activity?," Public Choice, Springer, vol. 194(3), pages 297-324, March.
    16. He, Eric & Jacob, Martin & Vashishtha, Rahul & Venkatachalam, Mohan, 2022. "Does differential taxation of short-term relative to long-term capital gains affect long-term investment?," Journal of Accounting and Economics, Elsevier, vol. 74(1).
    17. Leschnig, Lisa & Schwerdt, Guido & Zigova, Katarina, 2022. "Central exams and adult skills: Evidence from PIAAC," Economics of Education Review, Elsevier, vol. 90(C).
    18. Li, Yuan & Yi, Yuyao & Li, Xiaofan & Tao, Yunqing, 2024. "Do error-tolerance and correction mechanisms enhance the performance of state-owned enterprises in China?," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    19. Li Chen & Hao Cheng & Fujia Li & Zihan Song, 2025. "Can Digital Infrastructure Construction Promote Energy Conservation in Resource-Based Cities? Evidence from the “Broadband China” Strategy," Energies, MDPI, vol. 18(18), pages 1-25, September.
    20. Joakim Weill, 2023. "Flood Risk Mapping and the Distributional Impacts of Climate Information," Working Papers 2023.10, FAERE - French Association of Environmental and Resource Economists.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:palcom:v:12:y:2025:i:1:d:10.1057_s41599-025-04614-4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: https://www.nature.com/palcomms/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.