How the Political Background of Listed Companies Affects Corporate Digital Innovation

Using data of A-share listed companies in China from 2013 to 2022, this paper examines the effect of listed companies' political background on corporate digital innovation by empirical tests. The findings show that the political background of listed companies significantly promotes corporate innovation activities. Further tests reveal that the above promotion effect is more prominent in non-state-owned enterprises, enterprises with a high level of digital financial inclusion, and high-tech enterprises. Meanwhile, when the intensity of R&D investment is higher, the positive effect of political background in promoting digital innovation is more obvious. In addition, we also find through mechanism analysis that the political background of listed companies affects corporate digital innovation through three channels: enhancing the enterprises ability to obtain resources, improving the level of risk-taking and creating a corporate innovation culture. The findings of this paper provide new references for rationally utilizing the government-business relationship to promote China's development from a digital power to a digital superpower.