IDEAS home Printed from https://ideas.repec.org/a/eee/ecanpo/v83y2024icp1-16.html
   My bibliography  Save this article

Mystery of special government subsidies: How does digital transformation promote enterprise innovation and development?

Author

Listed:
  • Yang, Yuhan
  • Zhang, Chong
  • Liu, Baoliu
  • Huang, Yujie
  • Tai, Yafei

Abstract

The digital transformation of enterprises has become an important driving force in promoting the high-quality development of China's economy and in-depth implementation of an innovation-driven development strategy. To this end, this study uses the panel data of China's A-share listed enterprises from 2010 to 2019 to explore the relationship among enterprise digital transformation, government subsidies, and innovation. Results indicated that digital transformation can significantly stimulate enterprise innovation. The impact mechanism test shows that the digital transformation of enterprises can increase their R&D expenditure and alleviate their financing constraints, thereby jointly promoting enterprise innovation in terms of innovation resources and financing resources. Furthermore, heterogeneity analysis indicates that digital transformation has a greater incentive effect on private enterprises, non-technology enterprises, service industries, and growth stage enterprises. By introducing special financial subsidies for digital transformation, special financial subsidies for digital transformation are shown to have a positive impact on the sensitivity of digital transformation and enterprise innovation. This effect is also played out through innovation spending and corporate finance, and the role of long-term financing is greater than that of short-term financing. Therefore, the role of digital transformation in promoting enterprise innovation must be actively played to achieve a high-quality development of the regional economy.

Suggested Citation

  • Yang, Yuhan & Zhang, Chong & Liu, Baoliu & Huang, Yujie & Tai, Yafei, 2024. "Mystery of special government subsidies: How does digital transformation promote enterprise innovation and development?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 1-16.
    • Handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:1-16
    DOI: 10.1016/j.eap.2024.06.003
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0313592624001437
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eap.2024.06.003?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ding, Chante Jian & Chen, Hang & Liu, Yin & Hu, Jin & Hu, Mingjun & Chen, Dong & Irfan, Muhammad, 2024. "Unleashing digital empowerment: Pioneering low-carbon development through the broadband China strategy," Energy, Elsevier, vol. 295(C).
    2. Chen, Yuanhan, 2024. "Cleaning Russian oil industry for energy resource exploration and industrial transformation towards zero carbon green recovery: Role of inclusive digital finance," Resources Policy, Elsevier, vol. 88(C).
    3. Erik Brynjolfsson & Kristina McElheran, 2016. "The Rapid Adoption of Data-Driven Decision-Making," American Economic Review, American Economic Association, vol. 106(5), pages 133-139, May.
    4. Zhuo, Chengfeng & Chen, Jin, 2023. "Can digital transformation overcome the enterprise innovation dilemma: Effect, mechanism and effective boundary," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    5. Zhiqiang Lu & Junjie Wu & Hongyu Li & Duc Khuong Nguyen, 2022. "Local Bank, Digital Financial Inclusion and SME Financing Constraints: Empirical Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(6), pages 1712-1725, May.
    6. Chong Zhang & Baoliu Liu & Yuhan Yang, 2024. "Digital economy and urban innovation level: A quasi-natural experiment from the strategy of “Digital China”," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
    7. Cheng, Weixuan & Li, Cheng & Zhao, Tianjiao, 2024. "The stages of enterprise digital transformation and its impact on internal control: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 92(C).
    8. El Baz, Jamal & Ruel, Salomée, 2024. "Achieving social performance through digitalization and supply chain resilience in the COVID-19 disruption era: An empirical examination based on a stakeholder dynamic capabilities view," Technological Forecasting and Social Change, Elsevier, vol. 201(C).
    9. Zhang, Kaixia & Bu, Caiqi, 2024. "Top managers with information technology backgrounds and digital transformation: Evidence from small and medium companies," Economic Modelling, Elsevier, vol. 132(C).
    10. Teng, Yuanyang & Zheng, Jianzhuang & Li, Yicun & Wu, Dong, 2024. "Optimizing digital transformation paths for industrial clusters: Insights from a simulation," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    11. Sun, Guanglin & Fang, Jiming & Li, Jinning & Wang, Xiaolin, 2024. "Research on the impact of the integration of digital economy and real economy on enterprise green innovation," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    12. Zhao, Shikuan & Cao, Yuequn & Hunjra, Ahmed Imran & Tan, Yan, 2023. "How does environmentally induced R&D affect carbon productivity? A government support perspective," International Review of Economics & Finance, Elsevier, vol. 88(C), pages 942-961.
    13. Ren, Xiaohang & Zeng, Gudian & Sun, Xianming, 2023. "The peer effect of digital transformation and corporate environmental performance: Empirical evidence from listed companies in China," Economic Modelling, Elsevier, vol. 128(C).
    14. Verma, Pratima & Kumar, Vimal & Yalcin, Haydar & Daim, Tugrul, 2023. "Organizational architecture of strategic entrepreneurial firms for digital transformation: A bibliometric analysis," Technology in Society, Elsevier, vol. 75(C).
    15. Liu, Baoliu & Cifuentes-Faura, Javier & Ding, Chante Jian & Liu, Xiaoqian, 2023. "Toward carbon neutrality: How will environmental regulatory policies affect corporate green innovation?," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 1006-1020.
    16. Chen, Limei & Tao, Siyun & Xie, Xiaohan & Huang, Weidong & Zhu, Weiwei, 2024. "The evaluation of innovation efficiency and analysis of government subsidies influence—Evidence from China's metaverse listed companies," Technological Forecasting and Social Change, Elsevier, vol. 201(C).
    17. Yi, Yongxi & Zhang, Meng & Zhang, Aoxiang & Li, Yuqiong, 2024. "Can “dual credit” replace “subsidies” successfully? -based on analysis of vehicle supply chain decisions under the digital transformation of technology," Energy Economics, Elsevier, vol. 130(C).
    18. Li, ChangZheng & Razzaq, Asif & Ozturk, Ilhan & Sharif, Arshian, 2023. "Natural resources, financial technologies, and digitalization: The role of institutional quality and human capital in selected OECD economies," Resources Policy, Elsevier, vol. 81(C).
    19. Zhang, Yue & Ge, Mengshuai & Yang, Jiaju & Liu, Cuiying & Chen, Xi, 2023. "Controlling shareholders' equity pledge, digital finance, and corporate digital transformation," International Review of Financial Analysis, Elsevier, vol. 90(C).
    20. Zhao, Shikuan & Abbassi, Wajih & Hunjra, Ahmed Imran & Zhang, Han, 2024. "How do government R&D subsidies affect corporate green innovation choices? Perspectives from strategic and substantive innovation," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1378-1396.
    21. Zhai, Dongsheng & Zhang, Tianrui & Liang, Guoqiang & Liu, Baoliu, 2024. "Quantum carbon finance: Carbon emission rights option pricing and investment decision," Energy Economics, Elsevier, vol. 134(C).
    22. Thomas J. Chemmanur & Elena Loutskina & Xuan Tian, 2014. "Corporate Venture Capital, Value Creation, and Innovation," The Review of Financial Studies, Society for Financial Studies, vol. 27(8), pages 2434-2473.
    23. Luo, Haotian & Hu, Qing, 2024. "A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 494-519.
    24. Geng, Yini & Zheng, Zhiqiang & Ma, Yongjian, 2023. "Digitization, perception of policy uncertainty, and corporate green innovation: A study from China," Economic Analysis and Policy, Elsevier, vol. 80(C), pages 544-557.
    25. Škare, Marinko & Gavurova, Beata & Porada-Rochon, Malgorzata, 2024. "Digitalization and carbon footprint: Building a path to a sustainable economic growth," Technological Forecasting and Social Change, Elsevier, vol. 199(C).
    26. Li, Chengming & Wang, Yilin & Zhou, Zhihan & Wang, Zeyu & Mardani, Abbas, 2023. "Digital finance and enterprise financing constraints: Structural characteristics and mechanism identification," Journal of Business Research, Elsevier, vol. 165(C).
    27. Choi, Changkyu & Hoon Yi, Myung, 2009. "The effect of the Internet on economic growth: Evidence from cross-country panel data," Economics Letters, Elsevier, vol. 105(1), pages 39-41, October.
    28. Li, Minghuan & Jiang, Anxuan & Ma, Jianteng, 2023. "Digital transformation and income inequality within enterprises – Evidence from listed companies in China," Pacific-Basin Finance Journal, Elsevier, vol. 81(C).
    29. Hunjra, Ahmed Imran & Zhao, Shikuan & Goodell, John W. & Liu, Xiaoqian, 2024. "Digital economy policy and corporate low-carbon innovation: Evidence from a quasi-natural experiment in China," Finance Research Letters, Elsevier, vol. 60(C).
    30. Oludapo, Samson & Carroll, Noel & Helfert, Markus, 2024. "Why do so many digital transformations fail? A bibliometric analysis and future research agenda," Journal of Business Research, Elsevier, vol. 174(C).
    31. Malin Song & Heting Pan & Michael Vardanyan & Zhiyang Shen, 2023. "Evaluating the energy efficiency-enhancing potential of the digital economy: Evidence from China," Post-Print hal-04277444, HAL.
    32. Feng, Rui & Shen, Chen & Guo, Yiyang, 2024. "Digital finance and labor demand of manufacturing enterprises: Theoretical mechanism and heterogeneity analysis," International Review of Economics & Finance, Elsevier, vol. 89(PA), pages 17-32.
    33. Yang, Fan & Masron, Tajul Ariffin, 2024. "Role of financial inclusion and digital transformation on bank credit risk," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    34. Lyu, Yanwei & Xiao, Xuan & Zhang, Jinning, 2024. "Does the digital economy enhance green total factor productivity in China? The evidence from a national big data comprehensive pilot zone," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 183-196.
    35. Ding, Jian & Liu, Baoliu & Shao, Xuefeng, 2022. "Spatial effects of industrial synergistic agglomeration and regional green development efficiency: Evidence from China," Energy Economics, Elsevier, vol. 112(C).
    36. Tian, Guangning & Li, Bo & Cheng, Yue, 2022. "Does digital transformation matter for corporate risk-taking?," Finance Research Letters, Elsevier, vol. 49(C).
    37. Yang, Xiaodong & Liu, Xia & Ran, Qiying & Razzaq, Asif, 2023. "How does natural resource dependence influence industrial green transformation in China? Appraising underlying mechanisms for sustainable development at regional level," Resources Policy, Elsevier, vol. 86(PA).
    38. Xueqi Zhao & Longwen Zhao & Xiaozhe Sun & Yibing Xing, 2023. "The incentive effect of government subsidies on the digital transformation of manufacturing enterprises," International Journal of Emerging Markets, Emerald Group Publishing Limited, vol. 19(11), pages 3892-3912, February.
    39. Yu, Feifei & Du, Hongyan & Li, Xiaotong & Cao, Jiayu, 2023. "Enterprise digitalization, business strategy and subsidy allocation: Evidence of the signaling effect," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    40. Mendez-Picazo, María-Teresa & Galindo-Martin, Miguel-Angel & Perez-Pujol, Rafael-Sergio, 2024. "Direct and indirect effects of digital transformation on sustainable development in pre- and post-pandemic periods," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yaru Li & Qifan Zhang, 2024. "Corporate Digital Transformation and the Internationalization of R&D," Sustainability, MDPI, vol. 16(21), pages 1-20, October.
    2. Ruizhi Liu & Mengwei Hou & Ruifeng Jing & Alexandra Bauer & Mark Wu, 2024. "The Impact of National Big Data Pilot Zones on the Persistence of Green Innovation: A Moderating Perspective Based on Green Finance," Sustainability, MDPI, vol. 16(21), pages 1-28, November.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Baoliu & Huang, Yujie & Chen, Mengmei & Lan, Zirui, 2024. "Towards sustainability: How does the digital-real integration affect regional green development efficiency?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 42-59.
    2. Zhong, Changbiao & Zhang, Chao, 2024. "Can data elements enhance urban innovation? Evidence from China," China Economic Review, Elsevier, vol. 88(C).
    3. Wang, Baoyi & Khan, Inayat & Ge, Chenlu & Naz, Huma, 2024. "Digital transformation of enterprises promotes green technology innovation – The regulated mediation model," Technological Forecasting and Social Change, Elsevier, vol. 209(C).
    4. Zhang, Cheng & Fang, Jiming & Ge, Shilong & Sun, Guanglin, 2024. "Research on the impact of enterprise digital transformation on carbon emissions in the manufacturing industry," International Review of Economics & Finance, Elsevier, vol. 92(C), pages 211-227.
    5. Zhai, Dongsheng & Zhang, Tianrui & Liang, Guoqiang & Liu, Baoliu, 2024. "Quantum carbon finance: Carbon emission rights option pricing and investment decision," Energy Economics, Elsevier, vol. 134(C).
    6. Yang, Xue & Zhang, Peng & Zhao, Zuoxiang & Koondhar, Mansoor Ahmed, 2024. "How disaggregated natural resources rents affect financial development: From the perspective of sustainable development," Resources Policy, Elsevier, vol. 92(C).
    7. Teng, Yuqiang & Du, Anna Min & Lin, Boqiang, 2024. "The mechanism of supply chain efficiency in enterprise digital transformation and total factor productivity," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    8. Li, Mo & Li, Chunyan & Duan, Mingchen & Hou, Wenjia & Pan, Xingchen, 2024. "Analysis of the alleviating effect of accounts receivable pledge financing on financing constraints," Finance Research Letters, Elsevier, vol. 70(C).
    9. Yue, Sishi & Yang, Mo & Dong, Dayong, 2024. "Do enterprises adopting digital finance exhibit higher values? Based on textual analysis," The North American Journal of Economics and Finance, Elsevier, vol. 73(C).
    10. Jun, Xiao & Ai, Junwei & Zheng, Lingfeng & Lu, Meiting & Wang, Jianye, 2024. "Impact of information technology and industrial development on corporate ESG practices: Evidence from a pilot program in China," Economic Modelling, Elsevier, vol. 139(C).
    11. Wang, Guiying & Lamadrid, Richel L. & Huang, Yu, 2024. "Digital transformation and enterprise outward foreign direct investment," Finance Research Letters, Elsevier, vol. 65(C).
    12. Su, Yuqi & Tian, Gary Gang & Li, Hai-Chao & Ding, Chante Jian, 2024. "Climate risk and corporate energy strategies: Unveiling the Inverted-N relationship," Energy, Elsevier, vol. 310(C).
    13. Luo, Shuangcheng & Xiong, Zhiqiao & Liu, Jianjiang, 2024. "How does supply chain digitization affect green innovation? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 136(C).
    14. Zhang, Chaoshuai & Qiu, Peng & Zhang, Liang & Hong, Xiaoyu & Wang, Dingqing, 2024. "The impact of digital transformation on enterprises' export stability: Evidence from listed companies in China," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    15. Ye, Xiaoyu & Tian, Xiangyu, 2025. "Green finance and ESG performance: A quasi-natural experiment on the influence of green financing pilot zones," Research in International Business and Finance, Elsevier, vol. 73(PB).
    16. Ge, Tao & Hao, Zixuan & Chen, Yuan & Chen, Zhanbo, 2024. "Energy intensity constraints and corporate investment strategies: Evidence from Chinese listed enterprises," Finance Research Letters, Elsevier, vol. 64(C).
    17. Wang, Feng & Rani, Tayyaba & Razzaq, Asif, 2024. "Resource curse, energy consumption, and moderating role of digital governance: Insights from South Asian countries," Resources Policy, Elsevier, vol. 98(C).
    18. Bai, Hengrui & Huang, Lingyu & Wang, Ziqi, 2024. "Supply chain financing, digital financial inclusion and enterprise innovation: Evidence from China," International Review of Financial Analysis, Elsevier, vol. 91(C).
    19. Jiang, Chun & Qiu, Yihan & Li, Xiao-Lin & Si, Deng-Kui, 2024. "Does stock market liberalization promote entrepreneurship?," Economic Analysis and Policy, Elsevier, vol. 83(C), pages 480-495.
    20. Cheng, Hang & Ruan, Ping & Wang, Peng, 2024. "The impact of surging computing power on enterprise digital transformation–Based on quasi-natural experiments set up by the National Supercomputing Center," Finance Research Letters, Elsevier, vol. 65(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecanpo:v:83:y:2024:i:c:p:1-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/economic-analysis-and-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.