E-commerce adoption, financing constraints, and innovation persistence of firms

The Chinese economy has a strong focus on improving quality and efficiency. However, it faces a challenge known as the ‘technological innovation fatigue’. Overcoming this obstacle requires persistent innovation by enterprises. Using data from 168 Chinese manufacturing enterprises from 2015 to 2022, this study constructs a panel regression model to investigate the relationships between e-commerce adoption, financing constraints, and corporate innovation persistence. Our findings indicate the following: (1) E-commerce adoption directly contributes to enhancing innovation persistence in manufacturing enterprises and at the same time indirectly facilitates innovation by easing financing constraints; (2) Industry-specific, regional, and size-based heterogeneity exist in the impact of e-commerce adoption on corporate innovation persistence. Consequently, this study emphasizes the need to cultivate in-depth collaboration between internet platforms and enterprises, improve financing conditions and relevant policies. We also show the need to implement cohesive development strategies tailored to the specific circumstances of enterprises of different types and regions.