Can network infrastructure construction improve the low-carbon innovation of Chinese enterprises?

This study considers the implementation of the "Broadband China" strategy as an exogenous policy shock and examines the impact of network infrastructure construction (NIC) on the low-carbon innovation (LCI) of enterprises and its underlying mechanisms by using a progressive difference-in-difference model based on the data of Chinese listed enterprises from 2009 to 2020. This study finds that NIC can improve the LCI of enterprises. After the elimination of the sample selection bias and selection of the urban slope as the exogenous instrumental variable, the conclusions remained robust. The results of the mechanism test show that upgrading the human capital level, reducing transaction costs, and alleviating financing constraints are the three important paths through which NIC can help enterprises improve their LCI level. The heterogeneity analysis determines that NIC has considerable comparative advantages for enterprises with executives who have a financial background and enterprises with high knowledge stock. In addition, LCI improvement can further enhance enterprise value. The research conclusions can broaden the microscopic research perspective of enterprise transformation and upgrading theory and provide reliable empirical evidence for China's low-carbon economic transformation.