Can Intelligent Manufacturing Empower Enterprise Innovation? A Quasi-Natural Experiment Based on China's Intelligent Manufacturing Demonstration Project
YIN Hongying, LI Chuang
Business School, Soochow University; School of Accountancy, Shanghai University of Finance and Economics
Summary:
China's manufacturing industry remains large but not robust. To transition from a manufacturer of quantity to one of quality, China needs to promote new economic forces and enhance its capacity for independent innovation.Intelligent manufacturing is currently seen as the key to empowering business and fostering economic growth. The ensuing question is whether intelligent manufacturing can become a new driving force for increasing quality among Chinese manufacturing firms, and if so, through what mechanism it can do so. In accordance with the Announcement of the List of Pilot Demonstration Projects of Intelligent Manufacturing issued by the Ministry of Industry and Information Technology of the People's Republic of China, this paper uses the propensity score matching method with difference-in-differences to investigate the effect of intelligent manufacturing on enterprise innovation behavior and the mechanism. The results show the following: (1) Intelligent manufacturing promotes enterprise innovation, and the effect holds following a battery of endogeneity and robustness tests. (2) Intelligent manufacturing facilitates enterprise innovation through the information channel, the human capital channel, and the capital channel. Through the information channel, intelligent manufacturing fosters innovation by enhancing firms' information gathering and processing capabilities, which in turn boost the flow of information in the research and development system. Through the human capital channel, intelligent manufacturing improves innovation by improving employees' innovation ability through optimizing the organization's human capital structure, increasing employees' on-the-job training behavior, and establishing effective human-machine collaboration. Through the capital channel, intelligent manufacturing enhances innovation by optimizing the supply chain relationship, bank-enterprise interactions, and the acquisition of legislative subsidies, thereby expanding the organization's innovation resources. (3) The innovation structure analysis shows that intelligent manufacturing can optimize the enterprise innovation structure and improve enterprise innovation quality. In particular, implementing intelligent manufacturing can foster enterprises' joint innovation, optimize the quality of enterprise innovation, and increase the number of patents cited by enterprises. (4) Based on the enterprise, industry, and market heterogeneity analyses, this paper shows that the positive effects of intelligent manufacturing on enterprise innovation are more pronounced for enterprises that are larger, non-state-owned, labor-intensive, in a highly competitive industry, and located in an area with a high level of intellectual property rights protection. (5) The value effect shows that intelligent manufacturing enables enterprise innovation to improve the current and future performance of enterprises, thus enhancing their long-term potential. This paper's contribution is mostly evident in the following three areas:First, this paper broadens the research paradigm related to the practical effect of intelligent manufacturing. Research on intelligent manufacturing lacks both a theoretical model and an empirical test. Based on the quasi-natural experiment of China's intelligent manufacturing demonstration project, this paper establishes a link between technology promotion and enterprise innovation and supplements and enriches research on the economic effects of intelligent manufacturing. Second, this paper enriches the literature on the factors that affect enterprise innovation. There are abundant studies on the factors influencing enterprise innovation, but few that examine the impact of the combination of informatization and industrialization on innovation behavior from the standpoint of information technology development. Against the backdrop of worldwide initiatives to promote intelligent manufacturing, it is crucial to investigate this topic. Finally, this paper offers guidance for and practical insight into the implementation and development of intelligent manufacturing. This paper examines the effects of the promotion and characteristics of intelligent manufacturing on the influencing mechanism and regulating factors of enterprise innovation. The results have practical implications for promoting China's national policy on intelligent manufacturing and the transformation and upgrading of enterprises.
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