Bridging the information gap: assessing the impact of online attention on firm productivity

Purpose This article draws on the external governance framework to theoretically analyze the complex relationship between online attention and firm productivity, then empirically examines the impact of online attention on firm productivity using panel data from A-share listed companies in China between 2011 and 2019. Design/methodology/approach This article employs a multidimensional fixed effects model to examine the impact of online attention on firm productivity. Firm advertising expenditure is used as an instrument in a two-stage least squares estimation. Robustness tests include adding additional fixed effects and substituting alternative proxies for both online attention and firm productivity. Heterogeneity is further explored using a moderation model. Findings The results indicate that online attention effectively enhances firm productivity. The positive impact on productivity mainly operates through technological innovation and cost-saving channels. Specifically, online attention boosts both innovation inputs and outputs, while also reducing cost-to-revenue ratios. The positive effect of online attention is more pronounced for state-owned and high-tech firms. Practical implications This article suggests, firstly, enhancing digital infrastructure and information dissemination systems to strengthen the structural foundations of online attention. Secondly, fully leveraging the dual role of online attention in promoting firm innovation and optimizing cost structures. Thirdly, the government should implement differentiated support policies to maximize the positive effects of online attention on state-owned and high-tech firms. Originality/value This study not only deepens the understanding of online attention's role but also provides both theoretical and empirical insights to aid nations in advancing their digital economies.