Mechanism and Path Analysis of Digital Technology Driving Industrial Digital Transformation

The process of transitioning traditional industries into the digital era is a critical component of China's strategic move towards a phase of high-quality economic growth. The integration of digital technologies has revolutionized conventional business paradigms and has infused the industrial sector with a fresh wave of dynamism. This study utilizes panel data from 30 Chinese provinces spanning the years 2013 to 2020. It constructs a baseline regression model, an intermediary effect model, and a regulatory effect model. Utilizing fixed effects models and instrumental variable techniques, the study conducts an empirical examination of the mechanisms and pathways through which digital technology influences the digital transformation of industries. It is found that digital technology is conducive to promoting industrial digital transformation. Heterogeneity test shows that the difference of East, west, central and western regions and economic development level all affect the promoting impact of digital technology on the digitalization of industry., and the promoting impact is stronger in the core area and the cities with high economic development level. The intermediary mechanism test shows that digital technology can promote industrial digital transformation through economic scale expansion and technological innovation, and the adjustment mechanism test shows that institutional environment exerts a beneficial regulatory influence within the operational dynamics of how digital technology drives industrial digital transformation. Drawing from the analysis above, In the context of digital economy, digital technology have a ability to help industrial digital transformation through the intermediary role of economic scale expansion and technological innovation, and provide an important strategy basis for China's effective implementation of vigorously developing new quality productivity and digital construction.