Can market-based allocation of data elements expand enterprise innovation boundary? Evidence from a quasi-natural experiment in China

Taking the construction of data elements trading platforms in selected cities as a quasi-natural experiment, this paper examines the impact of the market-based allocation of data elements on enterprise innovation boundary. Using data of 18,526 firm-year observations in China from 2010–2022, we find that the market-based allocation of data elements broadens enterprise innovation boundary by facilitating digital transformation, alleviating information asymmetry, and enhancing co-innovation activities among enterprises. Moreover, the expansion effect of the market-based allocation of data elements on enterprise innovation boundary needs to be supported by a high level of intellectual property protection. Our findings imply that policymakers should promote the market-based allocation of data elements to encourage enterprises to explore new areas of innovation.