In the context of China's high-quality economic development and the urgent task of “bottleneck”, it is of great practical significance to quickly improve the innovation quality of enterprises. At this time, the domestic digital economy is rapidly flourishing, and the digital economy has become a new direction for today's economic development. Digital information has also become a new supply factor for enterprise innovation activities. So, whether the digital economy can effectively improve the innovation quality of enterprises and stimulate the innovation potential of the real economy has become an important topic worth exploring in current academic theoretical research and enterprise practice.
This study is based on the fact that China's digital economy is developing rapidly, and analyzes the promoting effect of the digital economy on the quality of enterprise innovation and the mechanism of its impact. Using micro level data from 2609 listed companies from 2010 to 2021, and drawing on research methods such as Bradley et al. (2016), Zhang Jie, and Zheng Wenping (2018) to construct innovation quality indicators, and drawing on the research methods of Zhao Tao et al. (2020) to construct development indicators for the digital economy in 236 prefecture level and above cities in China, this study examines how the development of the digital economy affects the innovation quality of enterprises. Research has found that the improvement of the digital economy level has an inverted U-shaped impact on the improvement of enterprise innovation quality, that is, the innovation quality improvement effect of the digital economy has a inhibitory effect after passing through a turning point. After changing the estimation model, replacing core regression variables, and addressing endogeneity issues, the estimation coefficients still maintain significant robustness. In the inverted U-shaped mechanism, the intensification of product market competition will promote enterprises to improve their innovation quality, and the digital economy will affect the innovation quality of enterprises through the U-shaped effect on product market competition; the narrowing of the gap in cutting-edge technology among enterprises can improve the quality of innovation, and the U-shaped effect of the digital economy on the gap in cutting-edge technology among enterprises is also an important component of its impact mechanism on the quality of innovation.
Previous literature has extensively studied the significant positive effects of the development of the digital economy on improving innovation quality, but little attention has been paid to whether the effects will exhibit a non-linear pattern. Additionally, there is a lack of exploration into the impact mechanisms based on product market competition and cutting-edge technology gaps, which are also the main contributions of this article. This study to some extent enriches the theoretical and empirical research on the innovation effects of the digital economy, and further reveals the inherent logic between the development of the digital economy and the improvement of enterprise innovation quality. This helps government departments to formulate more targeted policies and measures to support the innovative development of enterprises during the historical period of booming digital economy, providing positive reference and inspiration for the achievement of the goal of “created in China”.