Digital economy and business investment efficiency: Inhibiting or facilitating?

The digital economy's integration with the real-world economy has revealed its remarkable ability to transform and promote traditional industries and form new economic development momentum. This paper studies the impact of digital economy development on corporate in-vestment efficiency based on data from China's listed companies from 2007 to 2019. There are three key findings. (1) Digital economy development can effectively improve corporate invest-ment efficiency, mainly by inhibiting their overinvestment. (2) The digital economy's impact mechanism for improving corporate investment efficiency lies in its ability to improve investment performance by reducing transaction costs and optimizing resource allocation, which, in turn, inhibits overinvestment. (3) The promotional effect of digital economy development on invest-ment efficiency shows significant variability across different types of firms. These findings have particular reference value for promoting the digital development of China's real industries and improving their investment efficiency.