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Big data technology and corporate investment efficiency: evidence from firm-level patent data

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Listed:
  • Xuechen Li
  • Shusheng Wang
  • Pengyi Dai
  • Haitong Li

Abstract

We investigate the effect of big data technology on corporate investment efficiency. Using the patent textual data of China’s listed firms to measure big data technology, we find that big data technology significantly improves corporate investment efficiency, and the alleviating effect on corporate inefficient investment is significant for both over-investment and under-investment. Our findings are robust to tests for an instrumental variable, a quasi-natural experiment, and alternative variables. We also find that alleviating information incompleteness and agency conflicts are the channels through which big data technology enables firms to invest more efficiently. Moreover, additional analyses show that the improvement in corporate investment efficiency is more pronounced in non-state-owned firms, smaller firms, firms with a lower competitive position, and firms under sound intellectual property protection. Our study enriches the research on the economic consequences of emerging technologies, and provides guidance for firms to improve their investment decision-making quality towards competitive advantages.

Suggested Citation

  • Xuechen Li & Shusheng Wang & Pengyi Dai & Haitong Li, 2025. "Big data technology and corporate investment efficiency: evidence from firm-level patent data," Applied Economics, Taylor & Francis Journals, vol. 57(41), pages 6572-6591, September.
    • Handle: RePEc:taf:applec:v:57:y:2025:i:41:p:6572-6591
    DOI: 10.1080/00036846.2025.2532062
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