Network infrastructure, digital technology innovation and enterprise performance: evidence from Chinese listed companies

In the digital economy era, the development of new infrastructure, particularly network infrastructure, can foster enterprise performance growth, both directly and by promoting digital technology innovation. This study empirically examines network infrastructure’s impact on enterprise performance using a combination of macro-level data from Chinese cities and micro-level data from Chinese listed enterprises. It explores the mediating role of digital technology innovation and investigates heterogeneity based on enterprise size and innovation type. The findings reveal that network infrastructure significantly enhances enterprise performance, a conclusion that remains robust even when using the ‘Broadband China’ policy as a quasi-natural experiment and the degree of urban topographic relief as an instrumental variable. Network infrastructure contributes to enterprise performance by enhancing both the quantity and quality of digital technology innovation. The impact of network infrastructure on enterprise performance is more pronounced for firms with non-independent innovation and for micro and small enterprises. These findings offer valuable insights for policymakers, urban planners, and business managers aiming to leverage network infrastructure for economic growth. Future research could explore how the impact of network infrastructure on firm performance varies across different political and economic contexts, industries, and between listed and non-listed companies.