The impact of internet on innovation of manufacturing export enterprises: Internal mechanism and micro evidence

Based on the matching data in the China Customs, Chinese industrial enterprises, and patent databases, this study uses the propensity score matching method (PSM) and the double difference model (DID) to study the impact of Internet use on enterprise innovation. The results show that Internet use can significantly promote the innovation level of China's manufacturing export enterprises, with obvious heterogeneity among regions. Compared with the central and western regions, the role of the Internet in promoting manufacturing export enterprises' innovation in the eastern region is more significant. Compared with the non-coastal regions, manufacturing export enterprises in the coastal regions benefit more. The promotion effect of the Internet on manufacturing export enterprises' innovation has a scale threshold and varies by ownership type: it is more significant on large and medium-sized enterprises, while state-owned enterprises have a higher innovation level than private enterprises. Mechanism analysis shows that Internet applications can, indeed, promote manufacturing export enterprises' innovation by reducing export costs and management innovation costs. The digital economy is becoming the driving force of development leading the era, and the use of the Internet has an important impact on enterprise digitalization and enterprise innovation. Based on the data of Chinese manufacturing enterprises, this study uses the propensity score matching method (PSM) and the double difference model (DID) to study the impact of Internet use on enterprise innovation. The results show that Internet use can significantly promote the innovation level of China's manufacturing export enterprises, with obvious heterogeneity among regions. Compared with the central and western regions, the role of the Internet in promoting manufacturing export enterprises' innovation in the eastern region is more significant. Compared with the non-coastal regions, manufacturing export enterprises in the coastal regions benefit more. The promotion effect of the Internet on manufacturing export enterprises' innovation has a scale threshold and varies by ownership type: it is more significant on large and medium-sized enterprises, while state-owned enterprises have a higher innovation level than private enterprises. Mechanism analysis shows that Internet applications can, indeed, promote manufacturing export enterprises' innovation by reducing export costs and management innovation costs. This study contributes to the micro analysis from the perspective of dual heterogeneity of enterprises and regions, which provides new evidence for explaining the development of internet economy and enterprise innovation in developing countries.