What is the role of telecommunications infrastructure construction in green technology innovation? A firm-level analysis for China

Telecommunications infrastructure can lead to network spillovers and has the advantages of breaking spatial barriers, reducing transaction costs, and fostering business model innovation. In this way, it can promote the proliferation and progress of green technology and may impact green technology innovation. This paper studies the impact of telecommunications infrastructure on green technology innovation, identifies its mechanism, and analyzes the scale, structure, and heterogeneity of its effects. This research treats the Broadband China pilot policy as a quasinatural experiment in telecommunications infrastructure and uses firm- and city-level data from 2008 to 2018 to conduct a difference-in-difference (DID) model analysis. The study finds that telecommunications infrastructure promotes green technology innovation. However, telecommunications infrastructure has a more significant impact in promoting low- rather than high-quality green technology innovation. Additionally, the results of the mediating effect analysis show that telecommunications infrastructure stimulates corporate green technology innovation by improving the level of informatization, increasing media attention and improving corporate governance. It is noteworthy that, when heterogeneity in enterprise ownership, financing constraints, and technology level is considered, non-state-owned enterprises and enterprises with low financing constraints and a high technology level are found to be more clearly affected by telecommunications infrastructure.

Automated summary

Telecommunications infrastructure plays a significant role in promoting green technology innovation, with more impact on low-quality green technology innovation. It stimulates corporate green technology innovation by improving informatization and corporate governance, especially affecting non-state-owned enterprises with low financing constraints and a high technology level.