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Industrial classification policy and its orientation on digital innovation: Evidence from a quasi-natural experiment and attention mechanisms

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  • Hou, Shaobo
  • Niu, Wenzheng
  • Chen, Baihe
  • Rong, Ke

Abstract

In an era where digital technology serves as a strategic emerging direction, this study aims to explore how industrial classification policy facilitates corporate digital innovation. Regarding China's Strategic Emerging Industries Classification (CSEIC) policy as a quasi-natural experiment, we use the difference-in-difference (DID) method and find that CSEIC has a significant and positive effect on digital innovation. We further find that CSEIC promotes exploratory digital innovation in state-owned enterprises (SOEs) and exploitative digital innovation in private-owned enterprises (POEs). The mechanism analysis suggests that in SOEs, the political arrangement and executives' political priority strengthen the positive relationship between CSEIC and exploratory digital innovation, while in POEs, the digital arrangement and executive priority can trigger the positive relationship between CSEIC and exploratory digital innovation. Based on the attention-based view (ABV), this paper provides a comprehensive understanding of how structural arrangement and selective focus match to leverage the influence of policy to innovation breakthrough in a specific attention situation.

Suggested Citation

  • Hou, Shaobo & Niu, Wenzheng & Chen, Baihe & Rong, Ke, 2026. "Industrial classification policy and its orientation on digital innovation: Evidence from a quasi-natural experiment and attention mechanisms," Technovation, Elsevier, vol. 151(C).
    • Handle: RePEc:eee:techno:v:151:y:2026:i:c:s0166497225002548
    DOI: 10.1016/j.technovation.2025.103422
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