Does the Digital Economy Improve the Innovation Efficiency of the Manufacturing Industry? Evidence in Provincial Data from China

Abstract

This paper selects panel data on 30 Chinese provinces from 2011 to 2020 and uses an econometric approach to empirically examine the impact of development in the digital economy on the innovation efficiency of China’s manufacturing industry. The results of this study show that during the period under investigation, the innovation efficiency of China’s manufacturing industry is in a stage of continuous improvement, and the development in the digital economy significantly promotes the level of manufacturing innovation efficiency, becoming an important driving force for the improvement in manufacturing innovation efficiency in the digital era. Moreover, the digital economy not only directly promotes manufacturing innovation efficiency but also has an indirect impact on such efficiency with industrial structure upgrading and technology spillover. With upgrading industrial structure and technology spillover, the digital economy has an enhanced effect on the innovation efficiency of the manufacturing industry. Using an analysis with the spatial Durbin model, it is found that the digital economy has a positive impact on the innovation efficiency of the manufacturing industry with spatial spillover characteristics.