The Role of Policy Perceptions and Entrepreneurs’ Preferences in Firms’ Response to Industry 4.0: The Case of Chinese Firms

Abstract

Favorable policy implementation results are due not only to policy makers’ abilities but also to the behavior of those responding to the policies. For example, a CEO’s understanding of a government policy’s content and his or her willingness to respond to it, based on the expectation of profits, plays a vital role. To understand the relationship between how policies are perceived and how enterprises behave in response to innovation policies in the era of the 4th Industrial Revolution (Industry 4.0), in this study, we use structural equation modeling to investigate the roles of various factors and examine the response mechanisms in enterprises through which entrepreneurs react to Industry 4.0 innovation policies. The hypothesized model is validated empirically using a sample collected from 337 domestic Chinese high-tech firms. The modeling results indicate that positive perceptions of policies have a positive effect on entrepreneurs’ preferences which, in turn, motivate positive behavior toward innovation. Moreover, testing the model showed partial and complete mediation effects, indicating that the perceived practicability of a policy is a factor with a strong impact on response behavior that sometimes exerts its influence by altering the mediator of entrepreneurs’ responsive preferences. The empirical results and management implications of this study can serve as a reference for the effective implementation of and response to government development plans.

Level of Regional Governments' Readiness to Deal with The Fourth Industrial Revolution Challenges: An E-Service Analysis

“…These studies reveal the importance of government political support through providing a policy framework responding to industry 4.0, namely the government's role in making policies and ecosystems that support industry 4.0 (Hoyer et al, 2020); The government responds to industry 4.0 through education policies that encourage innovation (Pabbajah et al, 2020); The role of the Government and start-up company culture are the main factors in the transformation of industry 4.0 readiness in India (Tripathi and Gupta, 2021); The Kazakh government responded to industry 4.0 through macro policy schemes for industrial development and industrial digitalization (Dikhanbayeva et al, 2021); Government policy responses to encourage the use of technology 4.0 through regulations that force the use of more sustainable and mature technologies and encourage initiatives towards the adoption and advancement of less mature technologies (Mabkhot et al, 2021); The Chinese government established the "Made in China 2025" plan to implement several policies to exploit the potential of high-tech manufacturing capacity in Industry 4.0. (Li et al, 2021); The government provides a policy framework that supports technology transfer (Alkhazaleh et al, 2022); Exponentially increasing government assistance can help Industry 4.0 SMEs in collaboration schemes with technology startups (Tama et al, 2022); The government's response through providing subsidies to encourage technological innovation of Chinese energy companies (Li, et al, 2023); The government plays a major role in developing and determining a triple helix collaboration framework between industry, government, and universities to face industry 4.0 (Kiss et al, 2023).…”