Author(s)

Qiang Wan, Yanni An^*

Business College, Xinyang Normal University, Xinyang, China.

With a panel data of Henan Province in China from 2014 to 2021, this study examines the role and mechanism of the digital economy on the integration of advanced manufacturing and modern service industries and analyzes the moderating effect of governmental intervention on the direct effect path. The study found that: (1) Digital economy can seriously promote the integration of the two industries and has significant heterogeneity in developed areas, heartland and higher levels of marketization which perform more prominently; (2) The digital economy enables the integration of the two industries through two intermediary channels: improving technological innovation and reducing transaction costs, with the former accounting for a higher proportion of indirect paths; (3) Governmental intervention plays an inverted U-shaped moderating effect between the digital economy and the two industrial convergence: the relationship between the integration of the two industries and the digital economy is positively moderated when there is minimal government interference; When the intervention level is high enough, the relationship between the two is negatively regulated, even reversing the promoting effect between the two. The research conclusion is not only of great significance to understand the role of digital economy in China’s economic transformation, but also provides a useful reference for policy makers in Henan Province.

Digital Economy, Industrial Convergence, Technological Innovation, Transaction Cost, Government Intervention, Inverted U-Shaped Regulatory Effect

Wan, Q., & An, Y. N. (2025). Digital Economy, Governmental Intervention and Industrial convergence: Evidence from Henan, China. American Journal of Industrial and Business Management, 15, 1019-1042. doi: 10.4236/ajibm.2025.157049.