Can digital government promote innovation in private enterprises? Evidence from China

This study applies a difference-in-differences (DID) model to examine the impact of digital government on private enterprise innovation in China from 2012 to 2021. Our findings indicate that digital government fosters innovation in private enterprises, with a stronger effect observed in high-tech firms, smaller enterprises, and those with fewer political connections. Mechanism analysis reveals that digital government enhances government support and reduces financing costs for private enterprises, thereby driving innovation.