This　study　investigates　how　the　digital　business　environment　affects　firms’　innovation　input　variables.　It　was　discovered　that　digitization　leads　to　ongoing　corporate　environment　optimization,　which　improves　the　effectiveness　of　innovation.　One　of　the　institutional　environment　factors,　digitalization,　increases　the　redundancy　of　government　subsidies　on　businesses’　investments　in　innovation.　It　also　helps　to　eliminate　duplication　in　innovation　investment　through　the　financial　environment　and　the　protection　of　legal　rights.　With　increasing　marketization　in　the　informal　institutional　framework,　the　degree　of　R&D　investment　redundancy　lowers　while　R&D　human　resource　investment　redundancy　grows.　Digitization　not　only　lowers　the　grade　of　innovation,　but　it　also　has　a　negative　association　with　the　duplicate　nature　of　commercial　R&D　investments.　The　authors’　research　combines　institutional　environment　theory　and　digital　development　to　establish　a　new　empirical　foundation　for　corporate　development　in　order　to　boost　innovation　efficiency.　©　2023　IGI　Global.　All　rights　reserved.