How digital government development drives corporate digital innovation: the new role of data network effects theory

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Authors: Zhenkun Zhang, Jing Cao, Qi He, Tianquan Jin
Cited by: 2
References: 65

Abstract

Digital Government Development (DGD), a key aspect of modern governance, uses digital technologies and data to promote high-quality economic growth. Based on China’s 2018 big data management reform as a quasi-natural experiment, this study applies a difference-in-differences approach to investigate how DGD affects corporate digital innovation through data network effects. Results indicate that the reform increases the expected number of digital invention patents for a median firm in pilot cities from about 4 to approximately 4.46. DGD, as an external platform node, appears to drive innovation by mandating data network access, reducing R&D manipulation, mitigating information asymmetry, and accelerating digital transformation, aligning with a potential mediation pathway. The effect is stronger in state-owned enterprises, high-tech firms, growing firms, and regions with stricter data privacy protections. Further analysis shows that DGD-driven innovation boosts total factor productivity. By adopting a data network perspective, this study contributes theoretically and practically to understanding governmental transformation in the digital economy.

Fields of Study & Subjects

E-Government and Public Services University-Industry-Government Innovation Models ICT Impact and Policies

Publication details

Journal / source
Industry and Innovation
Publisher
Informa UK Limited
Pages
1–27
Publication date
18 February 2026
Language
EN