Digital Infrastructure Construction and Corporate Total Factor Productivity: Evidence from China

This paper utilizes micro-matched data of Chinese A-share listed companies and city-level cellular base stations from 2014 to 2024 to investigate the impact of digital infrastructure construction on corporate total factor productivity (TFP). The study finds that digital infrastructure significantly improves corporate TFP. Mechanism analysis indicates that digital infrastructure exerts its effects mainly through two channels: alleviating external market frictions and enhancing internal organizational efficiency. Specifically, it improves the information environment, alleviates financing constraints, optimizes the allocation of innovation factors, and enhances operating efficiency. Heterogeneity tests show that management’s digital background, high-tech industry attributes, regional human capital, and the digital usage foundation have significant positive moderating effects. Further analysis shows that digital infrastructure not only promotes the expansion of firms’ local and non-local investment but also significantly increases the distance of non-local investment and the probability of cross-provincial investment. This paper provides empirical evidence for understanding how digital infrastructure empowers micro-level productivity improvement and optimizes spatial resource allocation.