Owing to their reproducibility, non-rival nature, and high value-addition attributes, data elements have become the most important factors of production in the era of digital economy. Hence, this study mainly investigates the effect and mechanisms of data elements on corporate innovation. Focusing on A-share listed firms from 2014 to 2022, this study adopts various methods to compute the provincial-level data element index in China and carries out empirical analysis of the effect of data elements on corporate innovation. The study finds that data elements boost the innovation level of the enterprises. Notably, data elements exert a promotional effect on corporate innovation through two channels: elevating the innovation capability of enterprises and easing financing constraints. However, the mechanism analysis finds that the opening of regional public data does not significantly promote the innovation-driven effect of data as a factor. Heterogeneity studies show that non-manufacturing firms and large-scale companies can better use data elements to promote corporate innovation level. Furthermore, this study reveals that the digital transformation of manufacturing enterprises at the current stage hinders the innovative effects of data elements. This study offers valuable evidence for accelerating the release of the power of data elements and promoting the innovation in Chinese listed companies.
Xia et al. (2026) studied this question.