Balancing technology and equity: how institutional investors influence the corporate digital divide

Using data from Chinese A-share listed firms from 2011 to 2022, we explore how institutional capital mitigates the corporate digital divide. Our findings show that institutional capital narrows the digital divide by easing financing constraints. This effect is stronger in non‑SOEs, labor‑intensive firms, firms led by executives without overseas or financial backgrounds, and those in the western region. Different types of institutional capital have varying impacts. These insights can inform national digital strategies to help overcome barriers posed by the digital divide.