Most traditional industries in China have reached a mature or declining stage, and their core competitiveness has declined compared to developing industries in the recent past. The paper studied the impact-mechanism of “Internet +” and verified its impacts on enterprise innovation performance. The data of 1040 traditional Chinese enterprises from 2011 to 2019 listed on the Shanghai and Shenzhen stock exchange were obtained from their annual reports by text-mining method. The purpose of these enterprises' selection was their present transformation of traditional Chinese enterprises from resource-driven to innovation-driven development strategy. The study employed poison-regression model to investigate the relationship of independent variables with innovation performance of these firms. In addition, we employed bootstrap method for validity of indirect effect. Based on the empirical evidence, we found that the “Internet +” significantly affects the innovation performance of traditional Chinese enterprises by influencing the organization's innovation elements, corporate governance structure, and corporate culture. The results do not change when we apply alternative variables in the model, which shows strong robustness. The findings of this research will help promote the deep integration of the internet in the real economy and promote more effective implementation of the “Internet +” national strategy in traditional enterprises.
Based on the life cycle theory, most traditional industries in China have entered a mature or declining stage, and their core competitiveness has weakened. Compared with the emerging industries in recent years, the growth rate of traditional industries began to decline, which is in the bottleneck period of development. China's economy is in the downward stage of the new normal, and the development of China's traditional enterprises is facing an unprecedented grim situation (Chenxi, 2020). From the perspective of China's economic development, China's economic growth has entered a new normal1 in the process of transformation from resource-driven to innovation-driven (Wang et al., 2016). How to transform and find new economic growth points has become the main problem faced by the development of traditional industries in China.
On March 5, 2015, the concept of “Internet +” was integrated into China's national economic policy so that enterprises could explore new growth targets. Internet thinking has been ingrained in China's economic development, providing new growth opportunities for the country's economy, especially for the traditional industry. Paunov and Rollo (2016) provided evidence of a strong positive relationship between the use of internet technology by industries and firm performance in the developing world. Similarly, firms with increased ICT investment are more likely to increase productivity (Reeson and Rudd, 2016). The integration of traditional industries and the internet has gradually accelerated in China. Specifically, the medical, financial, educational, and tourism industries are closely related to consumer life. The integration of these industries has been in a relatively mature stage, and a new internet economic model, such as Online-2-Offline (O2O), has emerged.
5. Conclusion and policy implications
The concept of “Internet +” is proposed to solve the problem of traditional enterprises to transmute from resource-driven to innovationdriven development strategy. The findings of this study extend the existing literature with new content by providing a certain degree of innovation in using micro-level data, innovation performance, and impact-mechanism of “Internet +”. The results show that “Internet +” significantly improves enterprise innovation performance. Based on the empirical evidence through the impact-mechanism of “Internet +,” this paper draws the following conclusions.
The findings first revealed that the “Internet +” policy of the Chinese Government allowed companies to raise their R&D funds and boost their innovation performance. Technical personnel influenced enterprises' innovation by playing their initiative. Internet access enabled technical personnel to obtain more innovation-related information and collaborative R&D opportunities. Thus, it enhanced technological innovation ability and further improved enterprise innovation performance. Second, the corporate governance structure has been converted from “vertical” to “horizontal”. The “horizontal” governance structure decreased the ownership concentration by reducing the largest shareholding ratio in the enterprises and by increasing the ratio of independent directors. As a result, the innovation performance of the selected enterprises is enhanced. Third, internet-enabled enterprises establish a more open and shared innovation culture. It improved communication among employees and helped enterprises to perform well in the innovation process. Therefore, the “Internet +” had a positive role in the innovation performance by employing the innovation elements, corporate governance structure, and corporate culture of traditional enterprises in China.