Cooperation or competition: How public data openness affects enterprise innovation

• In Event: AI Governance and Public Capacity in an Uneven Policy Landscape

Abstract

As data emerges as a pivotal factor of production in the digital economy, governments worldwide are accelerating the release of public data to unlock its innovative potential. The United States Data.gov platform now hosts over 500,000 datasets, and China has issued more than 200 municipal open-data platforms since 2012. After the U.S. Geological Survey opened its Landsat satellite archive free of charge in 2008, the number of scientific publications and commercial applications drawing on the data grew rapidly, spawning a wave of remote-sensing startups and patented innovations in precision agriculture, forestry, and water resource management. Yet whether the opening of public data platforms genuinely translates into firm-level innovation output remains a question that warrants further investigation. 
While existing studies have extensively documented the macroeconomic benefits of public data openness (PDO), they have paid insufficient attention to how data, as a production factor, shapes firm-level innovation. In practice, once data enters the public domain, the accompanying reduction in acquisition costs can simultaneously foster inter-firm collaboration and intensify inter-firm rivalry. This raises the core question of this study: how does PDO reconfigure the relational structure among firms through which innovation actually emerges? 
Drawing on the literature, we conceptualize inter-firm dynamics along two dimensions, namely cooperation intensity and competition intensity, which yield four typical regimes: Coopetition (high cooperation and high competition), Cooperation (high cooperation and low competition), Competition (low cooperation and high competition), and Coexistence (low cooperation and low competition). This framework helps us discover the mechanism through which data factor shapes firm innovation outcomes, moving beyond the prevailing “black-box” of PDO’s microeconomic effects. 
Leveraging the staggered rollout of municipal PDO platforms in China as a quasi-natural experiment, we employ a multi-period difference-in-differences design on a panel of Chinese listed firms, examining the following hypotheses:
H1: PDO significantly enhances both the quantity and the quality of firm innovation.
H2a: PDO promotes innovation by strengthening the Cooperation regime among firms.
H2b: PDO promotes innovation by suppressing the Coexistence regime among firms. 
Results confirm that PDO significantly increases firm innovation output, in terms of both innovation quantity and innovation quality. Mechanism analysis reveals that PDO enhances firm innovation primarily by suppressing Coexistence and promoting Cooperation. Heterogeneity analyses further show that the innovation-enhancing effects are more pronounced in firms with higher levels of digital transformation, in non-state-owned enterprises, in firms at the growth and maturity stages of their life cycle, and in technology-intensive industries. Moreover, PDO exerts spillover effects on firms in neighboring regions. These findings shed light on how public data, as a new factor of production, can be leveraged to stimulate firm innovation, and thereby provide policy implications for promoting high-quality economic development and maintaining social stability.

Author

• Xiaofang Dai, Huazhong University of Science and Technology
  Presenting Author