Leveraging Local Standards for Systemic Innovation: How Internationalization Strategy Amplifies Radical Innovation in Manufacturing Business Systems

Systemic innovation is restructuring global industrial competition. This study focuses on the relationships between local product standards, firm internationalization, and radical innovation. Using panel data of Chinese listed manufacturing firms from 2005 to 2017, this paper empirically examines how local product standards shape corporate radical innovation and its underlying mechanisms, as well as the moderating role of firm internationalization. The results show that local product standards facilitate radical innovation through three key channels: regional knowledge spillovers, fair market competition, and cross-regional market integration. Firm internationalization positively strengthens the innovation-promoting effect of local product standards. Furthermore, heterogeneity analysis suggests that such beneficial effects are more salient for firms with low digital transformation, weak business credit, and those in non-high-tech industries.