Industrial digital platforms and corporate innovation: evidence from a quasi-natural experiment in China

Using the construction of Chinese industrial digital platforms (IDPs) from 2018 to 2022 as a shock, we investigate how IDPs facilitate innovation. The baseline finding shows that following IDPs construction, firms experience an increase in innovation as measured by patent production. To uncover the underlying channel, we show that IDPs have rich data resources, which enable firms to create a data network effects. We also find that IDPs enhance co-innovation capacity, reflecting platform data utilization and interconnected capabilities from both supply chain and cross-industry perspectives. The innovation driver effect of IDPs is more pronounced for larger firms, high-tech industries, and regions with better digital infrastructure. These findings illuminate IDPs’ unique roles and mechanisms in facilitating innovations and outcomes.