Can place-based big data policy enhance corporate innovation efficiency? Evidence from China

Using data from China, we examine whether and how the place-based big data policy implemented through the Big Data Comprehensive Pilot Zones (BDCPZ) enhances innovation efficiency at the firm level. We find that firms located in BDCPZ are significantly more likely to exhibit higher innovation efficiency than firms in other regions. Specifically, mechanism analysis demonstrates that the BDCPZ enhance innovation efficiency at the firm level through three distinct channels: facilitating digital transformation, accelerating knowledge flows, and elevating human capital levels. Additionally, heterogeneity analysis reveals that this effect is concentrated among non-state-owned enterprises and firms in technology-intensive industries; additionally, the BDCPZ’s facilitative effect on innovation efficiency is stronger for firms located in regions with weaker intellectual property rights protection. Furthermore, additional analyses indicate that the BDCPZ simultaneously boosts both innovation input and output at the firm level, enhancing innovation efficiency without compromising quality. Our study advances understanding of place-based digital policies by showing how they improve firms’ conversion of innovation inputs into outputs, while offering insights for firm innovation and regional development.