Purpose Under the rapid development of the digital economy, digital transformation has become a national-level economic development strategy. The digital economy’s immense potential to enable enterprise innovation has attracted attention from government authorities. As a typical representative of digital innovation, China possesses significant advantages in the digital field, including a vast market size, diverse and complex consumer demands, abundant digital application scenarios, and massive data resources. These interrelated factors collectively contribute to a highly conducive ecosystem for digital innovation, enabling rapid technological development and large-scale deployment of digital transformation. The digital transformation policy implemented by the Chinese government provides an empirical environment for this study. Therefore, the purpose of this paper is to explore the impact and mechanism of digital transformation policy implemented by the Chinese government on enterprises’ digital innovation. Design/methodology/approach This study regards the “big data comprehensive pilot zone” policy as a quasi-natural experiment. The research sample consists of panel data from Chinese listed companies from 2010 to 2022. The difference-in-differences identification strategy is used to test the impact of digital transformation policy on enterprise digital innovation. Findings This study reveals that China’s big data comprehensive pilot zone policy has promoted the increase of enterprise digital patents, reflecting the incentive effect of China’s digital transformation policy on enterprise digital innovation. Mechanism analysis shows that the digital transformation policy effectively promotes enterprise digital innovation by optimizing industrial structure, increasing research and development support and improving the financial environment. Heterogeneity analysis indicates that digital transformation policy has a better positive effect on digital innovation for enterprises in the eastern region, non-resource cities and technology-intensive industries. Originality/value An essential distinction of this study from prior research lies in its emphasis on innovation with digital characteristics. By locking in the digital innovation patent of enterprises, the effectiveness of digital transformation policy can be more accurately evaluated, and the understanding of the impact of digital transformation policy on the digitalization of micro-entities of enterprises can be deepened. Furthermore, this study also provides empirical evidence from China’s digital regulatory framework, enriching the relevant research in this field.
Luo et al. (Thu,) studied this question.