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Institutional environment, technological innovation capability and service-oriented transformation

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  • Xin Su
  • Chunlan Mou
  • Shengshi Zhou

Abstract

The external institutional environment is the foundation for the survival and development of enterprises. Enterprises can only obtain legitimate and heterogeneous resources through continuous strategic reform and institutional innovation to match their internal strategies with the external environment. The paper selected the manufacturing enterprises that implemented service-oriented transformation strategies in China from 2016–2019 as a sample based on the realistic background of frequent institutional changes and overlapping market changes during China’s economic transformation. The impact of different aspects of the institutional environment on service-oriented transformation and the moderating role of technological innovation capacity were examined empirically. The results showed that (1) improved government governance greatly facilitates the service-oriented transformation of manufacturing enterprises, which was more pronounced within the industry. The regulated development of the market facilitated service-oriented transformation within the industry in the short term, while the impact on cross-border transformation lagged. The improvement of the legalized business environment was conducive to the transformation of enterprises and promoted intra-industry transformation significantly more than cross-industry transformation. (2) Technological innovation capability strengthened the influence of institutional environment on intra-industry transformation, but had no significant impact on the relationship between institutional environment and cross-border transformation. (3) The moderating effect of technological innovation capability was markedly heterogeneous in terms of property rights and regional heterogeneity. The findings of this study provide an important reference for policy makers to break through the current institutional barriers to transformation and upgrading of the manufacturing industry, and to reshape and optimize the institutional environment for the integration and development of the secondary and tertiary industries.

Suggested Citation

  • Xin Su & Chunlan Mou & Shengshi Zhou, 2023. "Institutional environment, technological innovation capability and service-oriented transformation," PLOS ONE, Public Library of Science, vol. 18(2), pages 1-24, February.
    • Handle: RePEc:plo:pone00:0281403
    DOI: 10.1371/journal.pone.0281403
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