Does big data application improve Chinese firms’ innovation: the role of talent accessibility

ABSTRACTFirms’ application of big data is widespread, while its impact on innovation in emerging economies remains unclear. Based on the panel data of 25,686 firm-level observations in China from 2007 to 2020, we conclude that big data application increases innovation through capital allocation efficiency improvement, human capital upgrading and information processing capability enhancement. Nevertheless, a lack of internal and external talent accessibility inhibits the innovation-driven effect of big data application. In light of our findings, emerging economies should enhance the availability of digital talent while improving the scope of big data application.KEYWORDS: Big data applicationtalent accessibilityinnovationinformation processing capabilityJEL CLASSIFICATION: D83M54O32 Disclosure statementNo potential conflict of interest was reported by the author(s).Notes1 Our sample starts from 2007 for there is no relevant digital data before 2007.2 The classification of industries is based on the report by the China Securities Regulatory Commission (2012). Since it is possible that there is a small variance within groups and a large variance between groups, we controlled for the industry fixed effect instead of the individual fixed effect.Additional informationFundingThis work was supported by The National Social Science Fund of China (Project No.21CJL024).