Abstract
Guided by the conviction that “Clear waters and green mountains are as good as mountains of gold and silver”, China highly values sustainable economic and social development through innovation and Internet technology. Regression analysis is performed to examine the impact of corporate information disclosure environment proxied by the Internet penetration rate on innovation. Leveraging from the city-level Internet penetration rates data in China from 2003 to 2017, this study gets the following findings: (1) Firms headquartered in cities with high Internet penetration rates tend to be more innovative, i.e. they invest more in research and development. (2) This result is supported by several robustness checks, such as alternative measures of key variables, alternative empirical specifications, and tests to mitigate identification concerns. (3) "financing constraint" and "tolerance of innovation failure" are two channels that influence firms’ innovative endeavors. (4) Additional tests show that Internet penetration rates facilitate a firm’s output efficiency of innovation input, total factor productivity, and human capital environment for innovation. The above conclusions not only enrich the relevant literature on the influencing factors of corporate innovation from the perspective of the firm information disclosure environment but also provide an important reference for further understanding the positive role of macro technology development on social and economic development.
Highlights
The results support H1a, which hints that with the improvement of the Internet environment in the city where the firm is located, external investors may obtain incremental information, the information dissymmetry and financing constraints will be alleviated, and even external investors are likely to increase their tolerance of management innovation failure
Innovation is critical for firm value and sustainable economic growth, recent academic research, and public policy discussion have both focused on identifying factors that lead to more and better innovation [62, 71]
Leveraging from the city-level Internet penetration rates data in China from 2003 to 2017, this paper examines the impact of corporate information disclosure environment on innovation investment
Summary
"Sustainable development" is the guiding concept of development in the 21st century [1]. The report of the 19th National Congress of the Communist Party of China has proposed to promote the in-depth integration of the Internet, big data, artificial intelligence, and the real economy, and cultivate new sustainable growth points and form new momentum in areas such as innovation leadership. The main finding are as follows: First, firms headquartered in cities with high Internet penetration rates tend to be more innovative, i.e. they have higher R&D (corporate’s research and development expenditure, Hereinafter referred to as R&D) intensity. Existing literature mainly focuses on the Internetization of corporate entities [4], while this study pays close attention to the information disclosure environment faced by external investors (including shareholders and creditors). The structure of the other parts of the article is arranged as follows: the second part, literature review and research hypotheses; the third part, research design; the fourth part, the analysis of empirical results; the fifth part, the conclusions
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Free) 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a call
