How Does Public Data Openness Affect Local Governments' Investment Attraction? Evidence from Subsidiary Establishment of Listed Manufacturing Firms in China

We employ a staggered difference-in-differences (DID) approach based on the launch of city-level public data open platforms (PDOPs) in China to examine the impact of public data openness on government investment attraction, specifically, subsidiary establishments by out-of-city firms. We find that the launch of a city’s PDOP significantly increases subsidiary establishments by out-of-city firms in that city by lowering their institutional transaction costs related to local government intervention, policy uncertainty, and unfair market competition. This effect is larger for cross-province investment and intra-urban-agglomeration investment, as well as for high-tech manufacturing firms. The evidence links public data openness to local government investment attraction and offers a policy channel for other developing regions seeking to lower entry barriers.