Can data assets spur corporate R&D investment?

This article investigates the impact of data assets on corporate innovation using a sample of Chinese A-share listed firms from 2007 to 2019. We find that data assets significantly increase firms’ research and development (R&D) expenditure. Moreover, this positive impact is stronger for firms with more complex information or facing greater competitive pressures. This pattern of evidence suggests that the data assets can improve firms’ abilities to integrate valuable information and increase their competitiveness, leading to more intensive innovation inputs. Further analysis shows the use of data assets also improves innovation outputs regarding patent applications and grants, especially high-quality innovations.