Abstract
Along with the rapid development of digital information technology, e-government is of great potential because it is a new form of conducting public administration and a way of demonstrating governmental innovation. The literature suggests that foreign direct investment (FDI) is increasingly associated with the continuing development of e-government in China. Using the Annual Census of Industrial Enterprises and e-government scores of government portals, this study examines the effects of e-government on FDI and how government subsidies mediate relationships between e-government and FDI. Our results show that e-government positively affects FDI, and government subsidies have a positive effect on foreign enterprises' investment efficiency by playing a mediating role between e-government efficiency and FDI. The findings make both theoretical and practical implications related to the role, provision and acquisition of government subsidies; e-government systems and FDI; e-government scores and government efficiency; and firms maintaining focus on areas that are government priorities.
Highlights
Foreign direct investment (FDI) plays a key role in driving economic growth (Logun, 2020; Zhang, 2001)
Hypothesis 1 proposed a positive relationship between e-government score and foreign direct investment (FDI)
Model 4 shows that the coefficient of the e-government score is 0.038 with a p-value of 0.000
Summary
Foreign direct investment (FDI) plays a key role in driving economic growth (Logun, 2020; Zhang, 2001). Due to the complexity of economic management, as well as checks-and-balances built into modern governments, the power and functions of authorities are commonly dispersed among various agencies, which often have varying locations, procedures, criteria, and agendas. The registry agency requires each firm to obtain high-tech status from the sci-tech agency before processing can commence. Given such bureaucratic inconsistencies or difficulties, approval processes that depend on multiple agencies can be protracted and provide government officials with more opportunities to pursue rent-seeking activities. Firms face higher costs, and lose confidence in the governments with whom they are dealing
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