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Does Internet Promote Product Upgrading of Manufacturing Enterprises? An Analysis Based on Technical Sophistication View

【Authors】
LU Fucai, JIN Huan
【WorkUnit】
LU Fucai (Jiangxi University of Finance and Economics, 330013)JIN Huan (East China University of Science and Technology, 200237)
【Abstract】

Internet's cross-sector operation and application have been widely debated among the professionals and academia in recent years, but existing literature rarely explores the impact of Internet use on the manufacturing product upgrading from a more microscopic product perspective. Based on the matching data of China Industrial Enterprise Database and China Customs Database, this paper uses OLS, Probit and Heckman selection models to study the impact of Internet on the horizontal products upgrade of enterprises and its internal mechanism. The findings are as follows: (1) enterprises using the Internet can significantly increase export probability and enhance technical sophistication; (2) the Internet has more obvious effects on the technical sophistication of technology-intensive and domestic enterprises; (3) technological innovation is an important mechanism opening the black box of manufacturing product upgrades, and Porter's emphasis on cost advantage is only a necessary condition for enterprises to upgrade their products and gain competitive advantage in the Internet environment. The conclusions of this paper have profound policy implications: At present, accelerating the application of the Internet in high-tech enterprises and domestic enterprises, and increasing support for enterprises' R&D and innovation investment are the key to upgrading China's manufacturing products.


JEL:F02, F14, F15

【KeyWords】
Internet, Product Upgrading, Technical Sophistication, Manufacturing Enterprise