Open Government Data and Firm Productivity: How Digital Capability Gaps Shape the Distribution of Productivity Gains in China

Open government data (OGD) lowers the cost of accessing public-sector data, but firms differ widely in their capacity to turn such access into productivity gains. This study examines how the firm-level digital capability gap—the distance between a firm's digital transformation level and the industry–year digitalization frontier—shapes the productivity effects of OGD. We develop a production model in which the effective cost of data depends on digital capabilities and test its predictions with a staggered difference-in-differences design that exploits the rollout of city-level open data platforms, using 31,238 firm-year observations of Chinese A-share listed firms from 2011 to 2024. OGD significantly raises firm total factor productivity (TFP), but the gains shrink as the digital capability gap widens: the estimated gain for a firm one standard deviation above the mean gap is less than one-fifth of that for a firm one standard deviation below it. Mechanism analyses suggest that the gap weakens the effects of OGD on transaction costs, technological innovation, and the information environment. These results imply that the economic returns to OGD depend on firms' complementary digital capabilities, highlighting the importance of combining open-data provision with capability-building policies to support more broadly shared productivity gains.