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Does internet convergence improve manufacturing enterprises’ competitive advantage? Empirical research based on the mediation effect model

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  • Pan, Maomao
  • Bai, Min
  • Ren, Xiaoxiao

Abstract

Internet convergence is an important strategic measure to accelerate the transition of the Chinese economy as well as the transformation and upgrade of the manufacturing industry and to achieve high-quality development. This study draws upon the theory of competitive advantage to investigate the influence of Internet convergence at different stages on manufacturing enterprises' competitive advantage. Using unique hand-collected patent data from Chinese manufacturing listed firms between 2005 and 2018, we found that technology convergence and market convergence enhance manufacturing enterprises' competitive advantage, while business convergence weakens the competitive advantage. In addition, the mechanism tests indicated that technology convergence, business convergence, and market convergence all contribute to the formation of product differentiation advantages that are difficult to imitate and enhance manufacturing enterprises' competitive advantages through product differentiation. Conversely, business convergence and market convergence harm cost control, and thus, reduce enterprises’ competitive advantage. The findings imply that emerging markets need to enhance their Internet convergence strategy.

Suggested Citation

  • Pan, Maomao & Bai, Min & Ren, Xiaoxiao, 2022. "Does internet convergence improve manufacturing enterprises’ competitive advantage? Empirical research based on the mediation effect model," Technology in Society, Elsevier, vol. 69(C).
    • Handle: RePEc:eee:teinso:v:69:y:2022:i:c:s0160791x22000859
    DOI: 10.1016/j.techsoc.2022.101944
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    3. Ke-Liang Wang & Ting-Ting Sun & Ru-Yu Xu, 2023. "The impact of artificial intelligence on total factor productivity: empirical evidence from China’s manufacturing enterprises," Economic Change and Restructuring, Springer, vol. 56(2), pages 1113-1146, April.

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    More about this item

    Keywords

    Internet convergence; Competitive advantage; Convergence stage; Product differentiation; Cost control;
    All these keywords.

    JEL classification:

    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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