The road to change: Broadband China strategy and enterprise digitization

Abstract

The digitization of a company necessitates not only the effort of the company but also state backing of network infrastructure. In this study, we applied the difference-in-differences method to examine the impact of the Broadband China Strategy on corporate digitalization and its heterogeneity using the data from Chinese listed firms from 2010 to 2020. The results show that the improvement in network infrastructure plays a vital role in promoting company digitization; this improvement is extremely varied due to variances in market demand and endowments. Non-state-owned firms, businesses in the eastern area, and technology-intensive businesses have profited the most. Among the five types of digitization, artificial intelligence and cloud computing are top priorities for enterprises. Our findings add to the literature on the spillover effects of broadband construction and the factors affecting enterprise digitalization.