The impact of digital economy on industrial structure upgrading: A strategic context

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Abstract

The primary objective of this paper is to investigate the impact of the digital economy on the upgrading of industrial structures. Drawing upon existing research (Wang & Wei, 2024; Luo, 2024), this study integrates technological innovation, factor allocation efficiency, the digital economy, and industrial structure into a unified analytical framework to examine the underlying mechanisms. Based on data collected from 296 prefecture-level cities in China between 2015 and 2018, and employing both the two-way fixed effects model and the mediation effect model, an empirical analysis is conducted. The results indicate that the development of the digital economy has facilitated the transformation of industrial structures toward more advanced and rational configurations. This effect is partially mediated by technological innovation and enhanced factor allocation efficiency. The findings also reveal that the influence is more pronounced in China’s central and Western regions as well as in large cities. Policy recommendations include increasing investment in digital infrastructure, accelerating the development of digital talent, promoting technological innovation and the application of digital technologies in enterprises, improving the efficiency of factor resource allocation by facilitating factor mobility, and enhancing digital economy development in central and Western regions to foster inclusive digital growth.

Keywords: Digital Economy, Industrial Structure, Resource Allocation

Authors’ individual contribution: Conceptualization — C.W.; Methodology — X.Y.; Formal Analysis — X.Y.; Data Curation — X.Y.; Writing — Original Draft — X.Y.; Writing — Review & Editing — C.W.; Supervision — C.W.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: L16, O33, O40

Received: 16.06.2025
Revised: 18.09.2025; 22.12.2025
Accepted: 19.01.2026
Published online: 21.01.2026

How to cite this paper: Yang, X., & Wang, C. (2026). The impact of digital economy on industrial structure upgrading: A strategic context. Corporate and Business Strategy Review, 7(1), 157–170. https://doi.org/10.22495/cbsrv7i1art14