Digital infrastructure and cross-regional collaborative innovation in enterprises

This article delves into the role that digital infrastructure plays in facilitating cross-regional collaboration in the innovation processes of enterprises. Collaborative innovation has emerged as a crucial mode of innovation for businesses engaged in technological R&D as the complexity of such R&D grows more sophisticated. In this study, we leveraged the recent nation-wide rollout of China's “Broadband China” strategic pilot program as a natural experiment to empirically investigate the impact of digital infrastructure on cross-regional collaboration in innovation. Our analysis of the financial data of Chinese A-share listed companies from 2008 to 2019 reveals that investments in digital infrastructure have a major impact on encouraging cross-regional collaborative innovation within businesses. Through the study, we examined the mechanisms through which digital infrastructure promotes cross-regional collaboration in innovation and found that the reduction in transaction costs serves as the key rationale for this phenomenon. Moreover, a heterogeneous analysis revealed that businesses with higher levels of technological R&D, industries characterized by rapid technological transformation, and cities with elevated levels of human capital are more likely to benefit from digital infrastructure investments that foster cross-regional collaborative innovation.