From paper to portal: how digital government reform shapes firm innovation in China

This study examines the impact of China's provincial Government Service Networks, a nationwide digital governance initiative, on corporate innovation. Using panel data on Chinese listed firms from 2009 to 2019, we leverage the staggered rollout of these platforms across provinces and employ a staggered difference-in-differences design. Our findings show that digital government reform significantly enhances firms’ innovation inputs and outputs, as reflected in higher R&D intensity and a greater number of invention patent applications. Further analysis provides evidence consistent with an administrative resource-allocation mechanism and indicates greater innovation benefits in regions with weaker initial institutional conditions. Heterogeneity analysis suggests that the effects are stronger among smaller firms and firms in traditional industries. Overall, our findings highlight the role of digital government reform in fostering innovation-driven growth and offer insights into how digital governance can stimulate firm innovation and support economic modernisation.