Information Accessibility and Corporate Innovation

Posted: 20 Dec 2018 Last revised: 8 Oct 2019

See all articles by Dongmin Kong

Dongmin Kong

Department of Finance, Huazhong University of Science and Technology; School of Finance, Zhongnan University of Economics and Law

Chen Lin

The University of Hong Kong - Faculty of Business and Economics

Lai Wei

Lingnan University - Department of Finance and Insurance

Jian Zhang

Shanghai International Studies University

Date Written: November 18, 2018

Abstract

This study identifies information accessibility as a determinant of corporate innovation. Using the sudden termination of Google’s search services in China, we find a persistently large negative effect on the intensity and quality of innovation among firms relying on foreign technology. The results are stronger for firms in industries dominated by foreign technology, in regions with local Web filters, and for firms with fewer alternative sources of foreign information. We also find that the affected firms cite fewer foreign patents and their innovation efficiency declines after Google’s exit. Overall, the results are consistent with the view that access to information is a key driver of technological progress.

Keywords: information accessibility, technological innovation, corporate information environment, Google’s exit

JEL Classification: D83, O31, O32

Suggested Citation

Kong, Dongmin and Lin, Chen and Wei, Lai and Zhang, Jian, Information Accessibility and Corporate Innovation (November 18, 2018). Available at SSRN: https://ssrn.com/abstract=3291811 or http://dx.doi.org/10.2139/ssrn.3291811

Dongmin Kong

Department of Finance, Huazhong University of Science and Technology ( email )

Wuhan, Hubei 430074
China

School of Finance, Zhongnan University of Economics and Law ( email )

Wuhan, Hubei 430073
China

Chen Lin

The University of Hong Kong - Faculty of Business and Economics ( email )

Pokfulam Road
Hong Kong
China

Lai Wei (Contact Author)

Lingnan University - Department of Finance and Insurance ( email )

8 Castle Peak Road
Lingnan University
Hong Kong, New Territories
China

Jian Zhang

Shanghai International Studies University ( email )

550 Dalian Road (West)
Shanghai, Shanghai 200083
China

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