Does digital judicial protection affect corporate digital innovation? Evidence from China

Using data from Chinese A-share listed companies from 2013 to 2022, this study treats the establishment of Internet courts as a quasi-natural experiment and employs a multi-period difference-in-differences model to examine the impact of digital judicial protection on corporate digital innovation. The results show that digital judicial protection significantly promotes corporate digital innovation, remaining robust to a battery of checks, including parallel trends analyses, placebo tests, and heterogeneous treatment effects. Digital judicial protection exerts a stronger positive effect on substantive digital innovation, non-state-owned firms, and high-technology firms. The effect is more pronounced in the Pearl River Delta but statistically insignificant in the Beijing-Tianjin-Hebei region. Moderation analyses further reveal that the positive impact of digital judicial protection is greater for firms with stronger digital information dynamic capabilities. These results highlight the role of digital judicial protection in fostering digital innovation and offer policy implications for advancing it.