Digital finance, absorptive capacity and enterprise dual innovation: an empirical analysis on mediation and threshold effects

Based on the data of listed companies in Chinese A stock market between 2011 and 2020, This paper discusses the empirical analysis of digital finance on enterprise dual innovation by adopting the mediating effect model and threshold regression model, and estimates the mediation and threshold effects of absorptive capacity among them. Our study find that the development of digital finance exerts a significant positive effect on enterprise dual innovation. Compared with exploitative innovation, digital finance exhibits a greater promoting effect on exploratory innovation. Absorptive capacity displays a greater mediating effect between digital finance and exploratory innovation, and exploitative innovation reveals a significant positive effect on exploratory innovation. There is non-linear relationship between digital finance and corporate dual innovation, and the promotion effect shows a leaping growth pattern and significant threshold effect. The heterogeneity analysis from the perspective of property rights and enterprise size shows that the incentive effect of digital finance development on enterprises dual innovation is mainly reflected in non-state-owned enterprises and small and medium-sized enterprises. This research expands the relevant theories of corporate innovation and digital finance, to provides empirical evidence for corporate decision-making.