How Does Government Data Openness Affect Inter-Regional Capital Flows? ——Evidence from Chinese-Listed Firms’ Off-Site Investment

Abstract

Transaction cost theory holds that information is the key factor to promote enterprise decision making, but the validity of this theory in the digital age remains to be tested. China’s government data openness provides us with opportunities. In our study, we focus on examining the impact of government data openness on inter-regional capital flows with the data of inter-regional investments of Chinese listed companies from 2009 to 2022. We find that the number of subsidiaries established by companies in regions where local governments have implemented open data platforms significantly increases, indicating that government data openness can facilitate the inter-regional flow of corporate capital. Mechanism analysis reveals that government data openness promotes capital flows across regions by improving the external business environment and reducing institutional transaction costs. The heterogeneity analysis reveals that government data openness tends to direct corporate capital more toward core cities, with this effect being especially pronounced for labor-intensive firms, those with stronger governance capabilities, and those with weaker government-business ties. Further analysis suggests that local government fiscal transparency positively moderates the impact of open government data on capital mobility, and that improving data quality can effectively enhance the influence of government data openness on inter-regional capital flows. This study has significant implications for the validity of transaction cost theory in the digital age and the application of data resource activation to promote economic growth and build a unified national market.

Keywords: open government data, data elements, capital flows, unified national market