Abstract: The integration of data elements into the production process of firms can effectively enhance the managements cognitive judgment of the prospects of investment projects and optimize firm investment behavior. However, the cognitive inertia and action inertia of the management will hinder this optimization effect. Based on the data of Chinas Ashare manufacturing listed companies from 2011 to 2020, this study empirically examines the impact of data elements on firm investment behavior. The results show that data elements significantly increase the scale of firm investment, suppress inefficient investment, and slow down insufficient firm investment. Data elements optimize firm investment behavior through supervision strengthening, and the higher the degree of investor specialization, the stronger the optimization effect. Due to the existence of cognitive inertia and action inertia, insufficient investment vision of management and implementation of traditional competitive strategies will weaken the optimization effect of data elements on firm investment. When cost leadership strategy and differentiation strategy are effectively integrated, data elements can reduce the inefficient investment brought by a single strategy.

Key words: data elements; firm investment behavior; supervision strengthening; cognition inertia; action inertia