Fiscal slack or environmental pressures: which matters more for technological innovation assimilation? A configurational approach

Abstract

Prior studies suggest that fiscal slack may positively affect technological innovation in the public sector but yield inconsistency between theoretical expectations and empirical findings. To address this research gap, this study develops a configurational explanation combining fiscal slack and environmental pressures by employing fs-QCA in the context of Chinese provincial governments’ online public service provision. The findings reveal that the role of fiscal slack is environmentally dependent on explaining technological innovation and that environmental pressures seem to be more important. That is, fiscal slack is likely irrelevant to a high degree of technological innovation assimilation, while the demanding environments of multiple environmental pressures matter. Relative fiscal scarcity may be somewhat relevant to a low degree of technological innovation assimilation only when combined with a more relaxed environment. Several theoretical and practical implications are discussed.