IDEAS home Printed from https://ideas.repec.org/a/bla/growch/v57y2026i1ne70101.html

Does Digital Infrastructure Promote the Upgrading of Manufacturing Enterprises? Evidence From China

Author

Listed:
  • Xiujuan Lan
  • Zheneng Hu
  • Xuan Pei
  • Chuanhao Wen

Abstract

The manufacturing industry (MI) in China has long been constrained by low‐end lock‐in. Digital infrastructure, as a solid foundation of the digital economy, has played an increasingly crucial role in economic growth as the digital transformation of global society accelerates. This raises an important question: Can the rapid development of digital infrastructure promote the upgrading of manufacturing enterprises (UME)? To investigate this, we selected manufacturing enterprises listed on the Shanghai and Shenzhen stock exchanges from 2004 to 2020 to empirically analyze the impact and mechanisms of digital infrastructure on UME. We find that digital infrastructure indeed significantly promotes enterprise upgrading. A heterogeneity analysis further reveals that this influence is more pronounced fro small‐scale and low‐tech manufacturing enterprises relative to large‐scale or high‐tech enterprises, and that it digital infrastructure contributes more to UME in underdeveloped rather than developed regions. Our mechanism analysis indicates that digital infrastructure supports UME by enhancing resource allocation efficiency and fostering technological innovation. These findings may have significant implications for developing countries, pointing toward a necessity for strengthening digital infrastructure and deepening its integration with the manufacturing sector. In particular, underdeveloped regions and small‐scale, low‐tech manufacturing enterprises should prioritize using digital infrastructure to advance the modernization of traditional manufacturing operations.

Suggested Citation

  • Xiujuan Lan & Zheneng Hu & Xuan Pei & Chuanhao Wen, 2026. "Does Digital Infrastructure Promote the Upgrading of Manufacturing Enterprises? Evidence From China," Growth and Change, Wiley Blackwell, vol. 57(1), March.
    • Handle: RePEc:bla:growch:v:57:y:2026:i:1:n:e70101
    DOI: 10.1111/grow.70101
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/grow.70101
    Download Restriction: no
    File URL: https://libkey.io/10.1111/grow.70101?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Pietrobelli, Carlo & Rabellotti, Roberta, 2011. "Global Value Chains Meet Innovation Systems: Are There Learning Opportunities for Developing Countries?," World Development, Elsevier, vol. 39(7), pages 1261-1269, July.
    2. John Humphrey & Hubert Schmitz, 2002. "How does insertion in global value chains affect upgrading in industrial clusters?," Regional Studies, Taylor & Francis Journals, vol. 36(9), pages 1017-1027.
    3. Qingwei Fu, 2022. "How does digital technology affect manufacturing upgrading? Theory and evidence from China," PLOS ONE, Public Library of Science, vol. 17(5), pages 1-18, May.
    4. Margarita Billon & Fernando Lera-Lopez & Rocío Marco, 2010. "Differences in digitalization levels: a multivariate analysis studying the global digital divide," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 146(1), pages 39-73, April.
    5. Dave Donaldson, 2018. "Railroads of the Raj: Estimating the Impact of Transportation Infrastructure," American Economic Review, American Economic Association, vol. 108(4-5), pages 899-934, April.
    6. Schade, Philipp & Schuhmacher, Monika C., 2022. "Digital infrastructure and entrepreneurial action-formation: A multilevel study," Journal of Business Venturing, Elsevier, vol. 37(5).
    7. Hongshan Ai & Shenglan Hu & Ke Li & Shuai Shao, 2020. "Environmental regulation, total factor productivity, and enterprise duration: Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 29(6), pages 2284-2296, September.
    8. Giuliani, Elisa & Pietrobelli, Carlo & Rabellotti, Roberta, 2005. "Upgrading in Global Value Chains: Lessons from Latin American Clusters," World Development, Elsevier, vol. 33(4), pages 549-573, April.
    9. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
    10. Tong Tang & Chun-Ai Ma & Heng-Yu Lv & Fu-Ying Hao, 2023. "The Effect of Corporate Resource Abundance on the Transformation and Upgrading of Manufacturing Enterprises from the Perspective of Whole Process Innovation," Sustainability, MDPI, vol. 15(14), pages 1-31, July.
    11. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    12. Xiaoli Hao & Xinhui Wang & Haitao Wu & Yu Hao, 2023. "Path to sustainable development: Does digital economy matter in manufacturing green total factor productivity?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 360-378, February.
    13. Seru, Amit, 2014. "Firm boundaries matter: Evidence from conglomerates and R&D activity," Journal of Financial Economics, Elsevier, vol. 111(2), pages 381-405.
    14. Koutroumpis, Pantelis, 2019. "The economic impact of broadband: Evidence from OECD countries," Technological Forecasting and Social Change, Elsevier, vol. 148(C).
    15. Kergroach, Sandrine, 2019. "National innovation policies for technology upgrading through GVCs: A cross-country comparison," Technological Forecasting and Social Change, Elsevier, vol. 145(C), pages 258-272.
    16. Ndubuisi, Gideon & Otioma, Chuks & Tetteh, Godsway Korku, 2021. "Digital infrastructure and employment in services: Evidence from Sub-Saharan African countries," Telecommunications Policy, Elsevier, vol. 45(8).
    17. Tang, Chang & Xu, Yuanyuan & Hao, Yu & Wu, Haitao & Xue, Yan, 2021. "What is the role of telecommunications infrastructure construction in green technology innovation? A firm-level analysis for China," Energy Economics, Elsevier, vol. 103(C).
    18. Zhenqiang Li & Qiuyang Zhou & Ke Wang, 2024. "The impact of the digital economy on industrial structure upgrading in resource-based cities: Evidence from China," PLOS ONE, Public Library of Science, vol. 19(2), pages 1-13, February.
    19. Youngjin Yoo & Ola Henfridsson & Kalle Lyytinen, 2010. "Research Commentary ---The New Organizing Logic of Digital Innovation: An Agenda for Information Systems Research," Information Systems Research, INFORMS, vol. 21(4), pages 724-735, December.
    20. Zongguo Ma & Xueai Fan & Yanli Zhang & Beibei Hu, 2023. "Understanding the Influencing Factors of Enterprise Transformation and Upgrading Capability: A Case Study of the National Innovation Demonstration Zones, China," Sustainability, MDPI, vol. 15(3), pages 1-25, February.
    21. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1403-1448.
    22. Weilong Wang & Jianlong Wang & Haitao Wu, 2025. "Assessing the Impact of New Digital Infrastructure on Enterprise Green Transformation from a Triple Performance Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 5594-5633, March.
    23. Gu, Qiankun & Song, Zilong & Sun, Yiyuan (Ian) & Yu, Xiaoou, 2024. "Digital infrastructure investment and corporate debt concentration: Evidence from a quasi-natural experiment," Pacific-Basin Finance Journal, Elsevier, vol. 86(C).
    24. Gereffi, Gary, 1999. "International trade and industrial upgrading in the apparel commodity chain," Journal of International Economics, Elsevier, vol. 48(1), pages 37-70, June.
    25. Brynjolfsson, Erik, 2013. "Wired for Innovation: How Information Technology Is Reshaping the Economy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262518611, December.
    26. Forman, Chris & Goldfarb, Avi & Greenstein, Shane, 2005. "How did location affect adoption of the commercial Internet? Global village vs. urban leadership," Journal of Urban Economics, Elsevier, vol. 58(3), pages 389-420, November.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liu, Jiali & Yu, Jiang & Chen, Feng & Zhang, Yaokun & Li, Bo, 2022. "How latecomers strategically respond to global-local resources and leverage local ecosystems: Evidence from China's integrated circuit design firms," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    2. Emanuele Brancati & Raffaele Brancati & Andrea Maresca, 2017. "Global value chains, innovation and performance: firm-level evidence from the Great Recession," Journal of Economic Geography, Oxford University Press, vol. 17(5), pages 1039-1073.
    3. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2023. "Functional upgrading and downgrading in global value chains: Evidence from EU regions using a relatedness/complexity framework," Papers in Evolutionary Economic Geography (PEEG) 2316, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Jul 2023.
    4. Yoshimichi Murakami & Keijiro Otsuka, 2020. "Governance, Information Spillovers, and Productivity of Local Firms: Toward an Integrated Approach to Foreign Direct Investment and Global Value Chains," The Developing Economies, Institute of Developing Economies, vol. 58(2), pages 134-174, June.
    5. Valentina De Marchi & Matthew Alford, 2022. "State policies and upgrading in global value chains: A systematic literature review," Journal of International Business Policy, Palgrave Macmillan, vol. 5(1), pages 88-111, March.
    6. R. Boschma & Eduardo Hernández-Rodríguez & A. Morrison & C. Pietrobelli, 2021. "Do global value chains and local capabilities matter for economic complexity in EU regions?," Papers in Evolutionary Economic Geography (PEEG) 2139, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Dec 2021.
    7. Emanuela Todeva & Ruslan Rakhmatullin, 2016. "Industry Global Value Chains, Connectivity and Regional Smart Specialisation in Europe. An Overview of Theoretical Approaches and Mapping Methodologies," JRC Research Reports JRC102801, Joint Research Centre.
    8. Charlotte Keijser & Michiko Iizuka, 2018. "Looking Beyond Global Value Chains in Capacity Development: The Case of the IT-Enabled Service (ITES) Sector in South Africa," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 442-461, July.
    9. Anna Giunta & Domenico Scalera & Francesco Trivieri & Jeffrey B. Nugent & Mariarosaria Agostino, 2011. "Firm Productivity, Organizational Choice and Global Value Chain," Working Papers 2011R09, Orkestra - Basque Institute of Competitiveness.
    10. Sithanonxay Suvannaphakdy & Alisa DiCaprio, 2021. "Are Asian least developed countries sidelined in advanced manufacturing production networks?," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 35(1), pages 134-152, May.
    11. Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2018. "Opening and linking up: firms, GVCs, and productivity in Latin America," Small Business Economics, Springer, vol. 50(4), pages 917-935, April.
    12. Carlo Pietrobelli & Cornelia Staritz, 2018. "Upgrading, Interactive Learning, and Innovation Systems in Value Chain Interventions," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 557-574, July.
    13. Valentina De Marchi & Elisa Giuliani & Roberta Rabellotti, 2018. "Do Global Value Chains Offer Developing Countries Learning and Innovation Opportunities?," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 30(3), pages 389-407, July.
    14. Eduardo Hernandez-Rodriguez & Ron Boschma & Andrea Morrison & Xianjia Ye, 2024. "Functional upgrading and downgrading in global value chains: The role of complementary interregional value chain linkages in EU regions," Papers in Evolutionary Economic Geography (PEEG) 2432, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Oct 2024.
    15. Cuervo-Cazurra, Alvaro & Pananond, Pavida, 2023. "The rise of emerging market lead firms in global value chains," Journal of Business Research, Elsevier, vol. 154(C).
    16. Ylömäki, Tobias, 2016. "Global Value Chain Upgrading," ETLA Working Papers 36, The Research Institute of the Finnish Economy.
    17. Weilong Wang & Jianlong Wang & Haitao Wu, 2025. "Assessing the Impact of New Digital Infrastructure on Enterprise Green Transformation from a Triple Performance Perspective," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 5594-5633, March.
    18. Pavida Pananond, 2016. "From servant to master: Power repositioning of emerging-market companies in global value chains," Asian Business & Management, Palgrave Macmillan, vol. 15(4), pages 292-316, September.
    19. Montalbano, Pierluigi & Nenci, Silvia & Pietrobelli, Carlo, 2017. "Opening and linking up: Firms, global value chains and productivity in Latin America," MERIT Working Papers 2017-030, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    20. Eunkyung Park & Martin Kang’ethe Gachukia, 0. "The Role of the Local Innovation System for Inclusive Upgrading in the Global Value Chain: The Case of KenyaGAP in the Kenyan Horticultural Sector," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 0, pages 1-26.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:growch:v:57:y:2026:i:1:n:e70101. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0017-4815 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.