Information and communication technology and innovation performance of firms: Evidence from Chinese listed state-owned enterprises

Abstract

This study examines whether information and communication technology (ICT) improves innovation performance among Chinese state-owned enterprises (SOEs). Generalized difference-in-differences, panel data regression models, and firm-level data from 2011 to 2018 were used to generate statistically significant results, indicating that publicly traded Chinese SOEs increase innovation performance through ICT adoption. Additionally, we analyze the robustness using a three-dimensional panel data model and employ two-stage least squares estimation to remedy the possible bias generated by endogeneity problems. The results of these tests were consistent with the main findings reported above. Additionally, the existing literature suggests that ICT affects innovation by increasing the openness of information sharing and cooperation, improving efficiency, and enhancing human resource management and corporate governance. We provide evidence of the underlying mechanisms between ICT and innovation among Chinese SOEs.