Research on the impact of e-government reforms on corporate investment efficiency: empirical evidence from China’s pilot policies

Purpose The purpose of this paper is to fill the gap in existing literature regarding the impact of e-government reforms on corporate investment efficiency. Specifically, it explores how such reforms influence corporate investment behavior and performance, particularly in China’s context. Design/methodology/approach This paper uses a quasi-natural experiment design, using the comprehensive e-government pilot policy implemented in China in 2018. A difference-in-differences (DID) model is used to empirically examine the policy’s effects on corporate investment efficiency. The study investigates the mechanisms behind the reforms, focusing on alleviating financing constraints, reducing cash holdings, and mitigating underinvestment and overinvestment. Findings The study finds that e-government reforms significantly enhance corporate investment efficiency. Key mechanisms include alleviating financing constraints and reducing cash holdings. The reforms mitigate underinvestment and overinvestment behaviors and reduce the influence of government-business relations. The positive effects are more pronounced in cities with higher administrative ranks, advanced digital infrastructure, nonstate-owned enterprises, and firms with lower managerial capabilities. Originality/value This research offers a novel perspective by empirically analyzing the impact of e-government reforms on corporate investment efficiency, an area that has been underexplored in prior literature. The findings provide important policy insights for leveraging e-government reforms to improve investment efficiency in businesses across various contexts, particularly in China.