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How Does Digital Consumption Affect Corporate Innovation Activity? Evidence from China’s Information Consumption Pilot Policy

Year: 2025

Type: article

Abstract: Amid rapid technological change and industrial transformation, digital consumption (DC) has become both a driver of domestic demand and a potential catalyst for corporate innovation. Yet, systematic evidence on how DC shapes innovation behavior remains limited. This study investigates the causal effect of DC on corporate innovation activity (CIA) by exploiting China’s Information Consumption Pilot Policy (ICPP) as a quasi-natural experiment with firm-level panel data from 2008 to 2022. The results show that DC significantly enhances CIA through three mechanisms: strengthening government attention to science and technology talent, advancing the circulation and utilization of regional data, and promoting corporate data assetization. Moreover, the effect is stronger in eastern regions, in areas with greater governmental digital engagement, and among firms with stronger managerial incentives. Further analysis indicates that DC not only increases overall innovation activity but also disproportionately fosters substantive innovation, as reflected in invention patents. These findings provide new empirical evidence on the differentiated role of DC in shaping both the quantity and quality of corporate innovation, offering insights for the design of digital economy policies in developing countries.

Source: Sustainability

DOI: 10.3390/su17219504

Authors: Aobo Pi, Siyuan Deng, Weifeng Zhao, Jiahui Wang

Institution: Wuhan Polytechnic University

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $2,896