Government digital initiatives and firm digital innovation: Evidence from China

Although the prevalence of digital innovation has attracted increasing attention from policymakers, academics, and practitioners, it remains under-theorized. Using the attention-based view, we examine why and how government digital-initiative intensity drives a firm’s digital innovation. Using a mixed-methods approach and the unique context of China’s aspirant economy, we find that managerial digital attention mediates the link between government digital-initiative intensity and firm digital innovation. Firm political guanxi and digital leadership have moderating effects on the relationship between government digital-initiative intensity and managerial digital attention, and the relationship between managerial digital attention and firm digital innovation. These findings have important theoretical and practical implications.