Promoting Industrial Symbiosis: Does the Synergistic Drive of Innovation and Domestic Demand Work? Evidence from Listed Enterprises in China

Driving the coexistence of manufacturing and producer services by enhancing the synergistic effect of innovation and domestic demand has important practical significance for China in building a new development paradigm with domestic circulation as the mainstay and dual circulation as a complement. Based on the time-series input–output tables and using data from China’s A-share listed companies from 2007 to 2022, this paper selects manufacturing and producer services as research objects to empirically test the driving role of innovation, domestic demand, and their synergy in the co-development of these two industries. The results indicate that innovation, domestic demand, and their synergy positively drive the coexistence and development of the two industries. After addressing endogeneity issues and conducting multiple robustness checks, the results remain robust. Heterogeneity analysis reveals that the synergistic effect of innovation and domestic demand on the coexistence of manufacturing and producer services is more pronounced in emerging enterprises, high-tech enterprises, small-sized enterprises, highly competitive enterprises, and enterprises with a high labor income share. This study provides reliable empirical evidence for the coordinated development of enterprise innovation and domestic demand, as well as its economic consequences. They have practical significance for China in forming an industrial symbiosis model, promoting the development of the Fourth Industrial Revolution, and breaking the low-end lock-in in the value chain.